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Jones Lang LaSalle adds a European Dimension to Sustainability Services

Jones Lang LaSalle is taking The Third Dimension, a unique sustainability risk mapping product, to clients in Europe.  Originally developed by Upstream in 2005, The Third Dimension enables investors to compare forecast risk and total return (the first two conventional dimensions of property investment analysis) with sustainability, namely The Third Dimension. 
Having been developed in partnership with several major players in the UK real estate investment world such as Hermes, Henderson and Schroders, The Third Dimension provides a forward looking perspective into how assets might perform in future, in the context of their exposure to a range of different sustainability risk scenarios. As such, it is being actively used by real estate investors as a management tool that sits right at the heart of the investment decision-making process. The Third Dimension is not, therefore, another research study or desk top risk rating.

In 2008, the syndicate comprised 12 institutional investors who submitted approximately 1,500 properties for analysis from 45 of their funds equating to approximately £30 billion of assets. In 2009, the number of properties analysed by this risk mapping product looks set to reach 3,000 as the product attracts new investors in the UK and is taken up across Europe by real estate investors in France, Germany and the Netherlands.

Julie Hirigoyen, lead director of Upstream Sustainability Services at Jones Lang LaSalle said: “The Third Dimension is designed to deliver tangible value to investors at a time of dramatic worldwide change. Energy management and sustainability have assumed huge importance to commercial real estate owners and occupants.  We work hand in hand with our clients to help them enhance profits from achieving their sustainability goals.  We provide a bespoke product, tailored to the needs and budgets of each individual client and designed to drive real sustainability performance improvements year on year.”

Following a launch of The Third Dimension in Paris on Wednesday 17th June which was attended by over 20 major institutional investors in France, Jones Lang LaSalle will create a local French Third Dimension syndicate. Similarly, the Jones Lang LaSalle team in the Netherlands will be hosting a launch event in mid- July, with the aim of creating a local Dutch Third Dimension syndicate in 2009, followed later in the year by a local German syndicate.  A pan-European syndicate will also be created for those clients who have assets outside of France, Germany and The Netherlands, and we will be developing syndicates to cover all of the main markets as the European product expands.

The Third Dimension members submit information about their properties by way of an online questionnaire, which in turn produces more than 100 pieces of data on that individual asset. The questionnaire encompasses a wide range of environmental, social and economic sustainability issues, covering themes such as energy use, water use, flooding and public transport, which piece together the risks (and opportunities) that a property may be presented with.  The issues are weighted on their legislative, operational and reputational risk.  Coupled with this is an individualised forecast risk adjusted return score, developed in conjunction with Property Market Analysis, which is aligned with the sustainability score , offering investors an exclusive insight to into what can be viewed as the three dimensions of investment analysis of property.

Nick Selmes, associate director at Upstream Sustainability Services at Jones Lang LaSalle added: “Thanks to the evolution since its inception four years ago, the sustainability risk element of The Third Dimension syndicate portfolios are now assessed through an analysis of the individual assets within each fund. This allows for a more detailed investigation of the results and enables the syndicate members to develop highly-effective strategies to address the risks and opportunities presented to them.  For this reason, The Third Dimension is a unique and complete forecasting product and leads the way in creating a reliable methodology for sustainable property investment analysis.”
The Third Dimension Syndicate Members that took part in 2008 include:
• F&C Property Asset Management
• Henderson Global Investors
• Hermes Real Estate
• ING Real Estate
• Invista Real Estate Investment Management
• LaSalle Investment Management
• Royal London Asset Management
• Schroders Property Investment Management
• The Church Commissioners
• The Crown Estate
• Universities Superannuation Scheme (USS)
• Workspace Group
They have been joined in 2009 by:
• CBRE Investors
• Climate Change Capital
• Legal & General