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Do property companies have a social obligation?

Rental_agreementOver 2,000 people are expected to attend this year’s edition of the MIPIM UK Summit (running from October 14 to 15), according to organisers. Ahead of the event, Funds Europe asked industry professionals if real estate firms have a social obligation.

At the first conference in 2014, delegates and speakers were met by a small crowd of protestors demanding “homes for people, not profit, housing for need, not greed”.

Five years on, and real estate asset managers such as Legal & General (L&G) have become increasingly active in the build-to-rent property sector. In June, L&G secured four housing schemes as part of its plan to deliver 3,000 affordable homes annually over the next four years.

With the UK in a housing crisis on one hand, and asset managers parading green and ethical investments on the other, this kind of real estate strategy appears to have a tint of social responsibility. Axa Investment Managers’ UK head of development Harry Badham sees a role for this.

“As supply chains grow longer, wider and more complex, the role of the real estate investor/developer is critical in unifying a shared purpose,” he says. “Social responsibility and engagement, rather than being a burden, will be critical to engaging both supply chains and customers as well as the wider market.”

Sara Bailey, head of real estate at international law firm Trowers & Hamlins and a member of the MIPIM UK advisory board, believes property companies have a social obligation.

“The quality of the built environment has a large impact on our quality of life. The places we live and work in have tangible and symbolic importance. There is therefore a direct responsibility for everyone working in real estate to deliver the best places and spaces possible,” she says.

Trowers & Hamlins recently completed research setting out criteria for developers, investors, public authorities and others to measure the social impact of developments. The firm argues that qualifying the social value of a development means it is possible to understand the long-term impacts and benefits for the development itself and for the wider community.

“Many practitioners within real estate are now looking at this area, such as the British Property Federation, which has also undertaken research on how the property industry can enhance and communicate its value to society,” says Bailey.

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