Sustainability as a key driver for value creation
2021 marks the beginning of a new cycle in the Spanish real estate market, with investors making a very positive assessment of the year and anticipating a period of strong growth for 2022. The coming years will be marked by the importance of compliance with ESG requisites, becoming a major investment criteria when buying and selling assets, turning over as key driver for value creation.
The impact on the real estate market is already significant, ranging from regulatory and tax topics to strategic planning and operational decisions. Real estate investors should determine their ESG ambitions and develop a portfolio of assets aligned accordingly with those plans.
In the context of mergers & acquisitions, the sustainability framework as an investment criteria introduces a new transactional risk, from compliance risk to operational and reputational risk. Companies and investors should therefore adjust their existing due diligence approaches to introduce the ESG criteria as well as new industry needs and standards, establishing appropriate KPIs to review targets and identify red flags.
From CG Capital Europe, we believe that investors that formally attach their investment criteria to ESG measures will be able to open up more attractive financing conditions, strength reputation with stakeholders and attract more clients and talent within their area of influence.
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