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EPRA Monthly Brief
June 2019
The month kicked off with very good news from the European Commission, which almost halved the capital requirements that insurers must allocate to liquidity reserves when investing in equities, including listed real estate. I invite you to read more about this achievement in the section below.

June was also very strong on investors, with a successful 12th Asia Week tour, which brought our members Adler Real Estate, Aroundtown, Befimmo and Covivio to five cities over five days. After more than 110 one-on-one meetings and two seminars with local institutional investors, the participants commented that after six years of outreach the investors have a more mature understanding and interest in European listed real estate. 

Back in Europe, we held our second Corporate Access Day with 19 companies and over 50 investors in the iconic Chelsea football stadium. It was pleasing to see a number of non-European investors attend again, and we look forward to repeating this experience on November 27 in London.

Finally, I am pleased to announce that in partnership with JLL, EPRA has launched a new Diversity & Inclusion Award, which will promote best practices amongst European listed real estate companies. There is more information about the submission process in this brief and I truly encourage all our property company members to take part in this initiative.
 
Dominique Moerenhout, EPRA CEO
EPRA news

Solvency II changes mark significant progress for listed real estate

The changes made to Solvency II, for which EPRA has been advocating over the last two years, were adopted earlier this month and have reduced capital requirement rates for insurance companies holding equities long-term, including listed real estate, from 39% to 22%. This marks significant progress for listed real estate, making the sector more attractive to insurers whose capital in Europe is one of the largest pools totalling approximately EUR 12 trillion. The changes have however one stipulation that holds the sector back: they apply only to listed real estate investments which are held for five years or more. While a 12-year period initially proposed by the European Commission was beaten down, a five-year holding period might still be considered as too restrictive by certain insurance companies. The next Solvency II review is foreseen for 2020, where EPRA will continue to advocate for an improved framework. Read more about the changes in Estates Gazette, Property Week and EuroProperty.

EU strategy on sustainable finance

On 18 June, the European Commission’s technical expert group (TEG) on sustainable finance published new reports on the EU Taxonomy, an EU Green Bond Standard, and Climate Benchmarks and Benchmarks’ ESG Disclosures. Together, these three reports mark an important step in the development of a much needed common language, tools and instruments for mainstreaming sustainability in the financial sector. EPRA welcomed the reports, in particular the recommendations for a classification system for sustainable economic activities, though retaining concerns regarding the thresholds, metrics and ex-ante approach that the TEG opted for. EPRA will continue engaging with the European Commission, among others through a call for feedback that the TEG will launch early July.

Submit your entry for the EPRA Diversity & Inclusion Award!

Listed real estate companies, members of EPRA, have the opportunity to participate in the recently launched Diversity & Inclusion Award. Actions within the community, supply chain, talent pools or the workplace are all valid within the scope of the Award. Focus areas could include, but are not limited to, gender, ethnicity, socio-economic background, age, disabilities and LGBT. Detailed guidance and accompanying criteria can be found in the '2019 Entry Guidelines', developed in partnership with JLL. The entry process will last until 30 September and the winners and nominees will be announced at the EPRA Sustainability Summit on 4 December. For more information, contact diversity@epra.com

Digital transformation and innovation in real estate

EPRA’s new PropTech & Innovation Committee, expected to launch in Q4 2019, will explore how companies adapt their business models to new technology. It will look at areas such as artificial intelligence, blockchain and how to harness innovation. Ahead of the launch, and in order to help our members keep up to speed with the pace of change in the industry, we are sharing KPMG’s Global PropTech Survey, which explores digital and technology adoption among property companies and real estate investors and highlights key barriers to driving transformation programmes. It also looks at industry attitudes towards data management, cyber security and Property-as-a-Service.
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