Triodos Bank finances leased real estate if it concerns sustainable projects of societal importance.
Triodos wants to contribute to a society with quality of life. Against this background, the bank finances real estate, says Tom Hendrikx, relationship manager for sustainable real estate. “For us, real estate financing is not financing a pile of stones with a long-term rental income. We are concerned with the interaction with the environment. At Triodos Bank, we always look at the combination of sustainability and social added value. It’s in our DNA.”
“Socially responsible and sustainable action is in line with the bank’s mission,” emphasizes Steven Rietberg, senior relationship manager for sustainable property. “Triodos was founded forty years ago to create the power of change with the help of money. This includes some philosophy; a more holistic view, everything is connected to everything. During the credit crisis, the bank experienced a significant growth spurt. During that time, we looked more closely at the business market. Not just for commercial properties. Triodos is also active in food and agriculture, art and culture, renewable energy and care and well-being.
How does social added value play a role in funding applications? Hendrikx refers to the housing market. “When we apply for housing financing, we explicitly look at the impact. What is important to build in today’s society? Our country is facing a huge housing shortage. There is a great demand for affordable housing in the middle segment and in the social sector. We can finance such housing, provided it is a sustainable project with added value for the environment.”
Sustainability is about more than just good energy quality. “There are many facets of sustainability. We look beyond insulation, solar panels and heat pumps. Building materials play a role. What materials are used in new construction or renovation? What is the environmental impact of such a project? We find it interesting to establish ties with the frontrunners in the real estate sector and make it economically possible to build with, for example, wood,” says Hendrikx.
The availability of a certain sustainability certificate is a requirement for both relationship managers, but more is needed. For example, a label says something about a building’s shell, but not about its use. Rietberg: “It would therefore be good if landlord and tenant looked at and acted on this together.”
Furthermore, future use plays a role in a positive decision on funding offers. Hendrikx: “In real estate for private elderly care, for example, we think it is important that there is a human dimension, where people in need of care can stay safely and comfortably. At the same time, we find it of added value if such a facility plays a role in the neighborhood and is important for the local residents.”
How is ‘greenwashing’ prevented? “We engage in dialogue with the customer. These conversations must show whether the customer is actually motivated to achieve the maximum result,” says Hendrikx. Rietberg adds: “We look at the entrepreneur himself, ask how someone feels about life and what future prospects he or she sees for that project. A customer must suit us. And the other way around. If it clicks, a long-term relationship can be built.
Triodos is not open to bridging loans or other short-term financing. It must involve the financing of long-term leased real estate or in combination with project development. The bank uses a limit for this. Property financing is possible from an amount of 2.5 million euros up to a maximum of 25 million euros for one customer. Larger amounts are not excluded, but the bank will then seek cooperation with partners such as the insurance company ASR or the traditional big banks. Sometimes there can also be partial funding from Triodos Green Fund, provided there is a so-called green statement, even if that fund is currently closed.
This financing strategy is not set in stone, emphasizes Hendrikx: “We also follow the changes in the market. We look at everything, sometimes with a particular result. In Rotterdam, for example, we financed the conversion of a warehouse into a modern business center. Such a new destination is also important for the quality of life in a neighbourhood. Just as we are also involved in the transformation of the former Slotervaart Hospital and the former Koepelgevangenis in Haarlem.”
The status of the sustainability file also plays a role, says Rietberg. “We must pay more attention to climate change. The speed must be increased, many agree. Triodos Bank has chosen to increase the requirements for sustainability. We want to be CO2-neutral in 2035, that is what is planned. It is a search together with our customers. Address the risks associated with possible sea level rise. We are talking about this with customers in the lower parts of the Randstaden, but what the sea level rise will mean for their real estate has not yet crystallized.”