Logistics Real Estate, the Little-Known Asset Attracting Sustainable Finance

To further commit to the ecological transition and enhance their corporate social responsibility, logistics real estate players are increasingly turning to sustainable finance. At developer Barjane—where CSR considerations are addressed from a project’s design stage and throughout the building’s operation—a first impact loan was signed with Arkéa Banque at the beginning of the year.

“It seemed natural to us to involve our financial partners in setting up loans designed to promote projects that have minimal or even positive environmental impact, improve working conditions, and foster inclusion and diversity,” says Julie Barlatier Prieuret, Managing Director of Barjane. “Our goal, starting in 2023, is to take out 100% sustainable loans, through green loans and impact loans.” For Christophe Bouthors, CEO of Telamon (formerly Groupe Panhard), sustainable finance in logistics is becoming “ increasingly cross-functional ”—both at the corporate level and for platform projects.

So what are the specific features of these sustainable loans compared with so-called traditional financing? There are many answers to that question. “These loans are granted to projects that have a positive impact on the environment and society,” notes Alexandre Zanger, Chief Financial Officer of Barjane. “Eligibility criteria may include measures to reduce energy consumption, actions to preserve biodiversity, or initiatives to improve workers’ health and well-being.”

From a financial standpoint, these sustainable logistics loans may include specific repayment terms to encourage borrowers to meet the criteria. For example, the interest rate may be adjusted upward or downward depending on the project’s performance. Lastly, obtaining this type of financing requires logistics real estate players to provide regular reports on environmental and social performance. “This can be a constraint, particularly for initial projects, but ultimately proves to be a worthwhile investment because it helps improve the monitoring and enhancement of CSR performance,” Alexandre Zanger continues.

Telamon has been betting on crowdfunding since late 2022. The logistics developer and asset manager completed an initial transaction for its 93,500 m2 platform in Nanteuil-le-Haudouin to finance a rooftop photovoltaic plant (19,410 panels). In this case, Telamon invited residents of Oise and neighboring departments to participate in the investment through crowd equity—equity crowdfunding in unlisted shares—with the support of Lendopolis, a Banque Postale subsidiary. The average commitment was €4,000. “This transaction enabled the local residents concerned to invest in the creation of renewable energy infrastructure whose output will be fed into the local grid,” Christophe Bouthors emphasizes. “For private investors, this vehicle offered the opportunity to acquire a capitalized-return investment starting at €20.”

Building on this successful first experience, Telamon aims to use crowdfunding for photovoltaic plants on each of its projects. “Renewable energy production is a major component of our development strategy, with the objective of reaching annual generating capacity of 50 MWp within five years from the rooftops of our future buildings alone,” the group’s CEO adds. According to him, this practice—which does not undermine a project’s financial balance—makes it possible to “ bring residents closer to ” and “ raise awareness among ” local residents about logistics projects built near them, while “ going further ” from a CSR standpoint. “Moreover, under the French Energy Regulatory Commission’s (CRE) scoring system, crowdfunding receives a better rating,” Christophe Bouthors specifies.

Sustainable finance in logistics entails CSR monitoring measures. “These commitments are measured and verified when a sustainable loan is put in place through an independent assessment, generally carried out by a third party or a bank department dedicated to these issues,” Alexandre Zanger explains. In this instance, this in-depth assessment may be conducted by Ecovadis or EthiFinance. For a logistics project, these independent organizations assess, among other things, waste-management criteria, the use of sustainable materials, and energy consumption.

“Performance reports are generally produced annually,” adds Barjane’s Chief Financial Officer. “These reports may include key performance indicators, quantitative and qualitative data, as well as information on measures taken to improve performance.” Depending on the results obtained, corrective measures may be proposed to improve the performance of a logistics site. “We adopted a CSR strategy long ago, but it has always been difficult to quantify what it delivers,” Julie Barlatier Prieuret recently told Business Immo. “Fortunately (…) we will be audited every year and, depending on our result compared with a panel of 500 companies, we will be able to benefit from rate reductions of 10 or 15 basis points (...).”

Because, according to Christophe Bouthors, “lenders and debt funds are increasingly concerned with financing environmentally responsible logistics assets or projects,” sustainable financing remains valuable support in helping the logistics sector reach new CSR milestones. “Economic considerations remain paramount, but between two projects with similar economics, banks will more readily finance the project that meets certain CSR criteria, while ultimately they will no longer finance—or will finance on far less favorable terms—those that do not meet these criteria,” Barjane’s Managing Director believes. 

Enough to encourage logistics real estate specialists to make extensive use of these impact loans. “Today’s ambitions in the CSR segment will be the minimum objectives in five or ten years’ time. In practice, this creates a virtuous circle for the entire chain, from financing to the life cycle of a logistics asset,” concludes Telamon’s CEO.