Scheduled fortnightly on Wednesdays at 2pm BST, IHM editor-in-chief George Sell is hosting an urban innovator webinar series in the run up to URBAN LIVING FESTIVAL 2020: stay-live-work, November 25-26 at Tobacco Dock in London.
In this week’s IHM Urban Living Webinar, Guest Host Adam MacLennan explored the ways sustainability and ESG investment is growing and changing in hospitality.
Joining MacLennan in the discussion were:
Richard Berridge, Blackbird Real Estate Advisory
James Fry, founder, Beyond Aparthotels
Leslie Gent, head of responsible investing, Coutts
Josh Littman, VP development – Europe, SH Hotels and Resorts
MacLennan kicked off the discussion asking how sustainability benefitted owners from a holistic perspective in the industry. Littman responded, saying sustainable designs can provide cost savings alongside potential communications benefits.
Littman responded saying: “There’s a misconception that building and running sustainable hotels costs more, and the reality is in most cases it doesn’t. There may be some initial costs that are above and beyond a normal hotel, but there are savings that are generated in overheads even in the short term.”
Fry added that he believed that a focus on sustainability is essential for futureproofing a potential hotel concept, noting that the current situation may enhance sustainability concerns. He also added that investors will be looking for properties with ESG features in the future.
Speaking for the build to rent sector, Berridge added: “The great thing about Build to Rent is that it’s driven by a different mindset to residential, and so Environmental, Social and Governance is high on the list. Because these assets are going to be held for 40 years plus, these guys are not looking to flip these assets, and maintain that protectible income.”
MacLennan inquired whether the guest cares as much, to which Berridge said that though rentals are ultimately about costs and money, some mid-market properties are coming onto market that may change the premium nature of low carbon housing. He added that zero-carbon premium pricing may make it difficult for guests to care as much.
Responding to a question about how ESG compliance can be achieved, Gent said: “For asset managers, regulation is coming and we will be required to produce MI around environmental and social metrics. We can only do that if the properties we invest in can produce that.”
Gent also noted the importance of transparency and strategy in terms of ESG, in order to keep ahead of regulation. In response to MacLennan’s question about the feelings of fund investors on sustainability, Gent noted that investors have become more curious as a result of the pandemic.
Fry added “Now I walk into a room and the right kind of investor goes ‘right before anything else, what are you doing sustainability-wise and how far are you going.”
Littmann said that currently many investors are seeking a gap in the market that sustainability-centred properties fill. Berridge added that many are also looking for opportunities to improve existing assets to become more ESG compliant.
Finally, Fry said on corporate travel buyers: “When we started it wasn’t important, it is on the list now, but how important it is to the actual corporate buyer is debatable. Ultimately they are motivated by reducing budgets, but it is the new age companies that are more interested in this.”
A full recording of the session can be found here.
The next webinar, hosted Wednesday, 26 August at 2pm BST will focus on Placemaking- overvalued buzzword or underutilised pursuit.
Guests will include:
Michael Goldin, Director, NoiseAware
Peter Heule, CEO, Short Stay Group and Yays
Eliza Liepina, Head of Product and Business Development, Alternative Accommodations, Roundhill Capital
Francesca Howland, Co-Founder, Bimble
Registration is available here.
