Real Asset Insight #6 June 2020

Technology and ESG have
come to the fore in crisis
Rikke Lykke, head of European asset management & regional head of Nordics, DACH and CEE,
tells RAI how PATRIZIA is responding to Covid-19 and the changes it has brought to real estate.
‘More and more
people have
realised that
you can actually
do business
effectively without
having to travel
to meet in person.’
Rikke Lykke, PATRIZIA
Staying close to your tenants or residents
is always important, how do you meet this
challenge at times of largescale disruption like
the current crisis?
PATRIZIA has always had a philosophy of staying
close to occupiers. We believe that it’s important
to speak the same language as our tenants,
literally and metaphorically, to understand the
local culture and trends as every market is
different. That’s why it’s key for us to be locally
present in each market we operate in.
We have more than 800 real estate experts on
the ground across four continents in 24 office
locations worldwide. That is a big advantage in
a crisis such as Covid-19 as we always remain
close to what is happening on the ground. It is
not only to the benefit of our tenants, but also to
our clients who invest in us and seek strong and
stable returns.
Covid-19 has brought many short-term
challenges for asset management, but will we
see the needs of tenants change in a post-crisis
world? Will it accelerate some trends such as
greater use or requirement for technology?
Technology changes were already in motion
prior to this crisis, but Covid-19 has certainly
accelerated them. For example, some digital
trends like online shopping have increased in
all markets. Another big one is video
conferencing where more and more people
have realised that you can actually do business
effectively via these platforms without having to
travel to meet in person.
A further major trend we are seeing is the
rising importance of ESG in the real estate
investment industry. It was also already a trend
prior to Covid-19, but we believe this crisis
is going to make ESG even more central to
business strategies as health and wellbeing,
as well as positive social impact in the
communities we operate in, becomes more
relevant than ever.
Will wellness and health move significantly up
the agenda for all tenants? How can this be
supported in terms of smart technology and
smart buildings?
There are several ways you can use existing
technologies that are available to help increase
health and safety in buildings during the crisis.
For example, there are smart sensors that can
measure the footfall of a shopping centre and
such technology could in the future be used to
prevent overcrowding and general breaches of
social distancing.
Then there are smart sensors that measure
the room temperature in buildings and those
could, for example, be used to monitor the
body heat of office employees arriving at work
to prevent anybody with a fever from entering
the building. One proptech VC fund we recently
invested in for Asia, called Taronga, actually
works very closely with proptech companies
that have pioneered exactly this type of smart
sensor system.
How do you see the role of the investor/owner
of a real asset change or reflect the needs of
a new and ever-changing set of demands and
requirements from tenants?
Around 30 to 40% of CO2 emissions worldwide
come from older real estate stock. As more
and more investors and occupiers alike
are increasingly focused on ESG, many of
them expect old property stock to become
carbon neutral by 2050 in line with the UN’s
development goals. Second, we also see the
quality of air of increasing importance and we
will invest increasingly in new cutting-edge
technologies that can monitor and measure air
quality to meet tenants’ demands. l
PATRIZIA is a European investment manager
with 24 offices worldwide.
56 Real Asset Insight | Issue 2 July 2020