Real estate and urban regeneration: the future lies in respecting social and environmental values

"It's up to operators like Lendlease to raise the bar and chart new horizons because building cities of the future means having the responsibility to exceed standards: if you set the horizon of an average target, you don't reward excellence and you can't expect innovation." This was the resounding statement made by Andrea Ruckstuhl, Head of Continental Europe at Lendlease, highlighting the sense of social responsibility of a large international corporation that is very prominent in our country, during "The importance of being ESG-Earnest in the Made in Italy innovation ecosystems," EPFIRE Forum Live, the concluding event of the Executive Program in Real Estate and Real Estate Finance, moderated by Alessia Bezzecchi, Program Director of the EPFIRE (Executive Program in real estate finance and real estate) and Associate Professor of Practice of Corporate Finance and Real Estate at SDA Bocconi.

The event was an opportunity to share some of the latest evidence that has emerged across Real Estate, particularly with regard to sustainability issues and ESG strategies. Beyond new mobility systems, increasingly innovative infrastructure, and attention to environmental issues, stakeholders are looking at new assets that can generate value. More and more space is being given to value proposition, the behaviors of companies and financial institutions, and the ability to create wealth for people in an "honest" and transparent way.

As noted by Stefano Caselli, Dean of SDA Bocconi and Full Professor of Banking & Finance: "Under certain conditions, the economic and social-environmental dimensions can converge, but not if contracts are driven solely by returns. There is a need for Equity investors and funds that are able to make projects more attractive, leveraging the ability to generate value from a social and sustainability perspective."

Drawing attention to the importance of Finance for the fulfillment of major projects Andrea Beltratti, Professor at the Department of Finance at Bocconi University, pointed out that short-term fears for real estate due to rising

interest rates may be mitigated in the medium term thanks to lower inflation, an observation that Giampaolo Gabbi, Professor of Practice Banking and Finance and Associate Dean Custom Programs Division Corporate and Financial Institution, elaborated on further by highlighting how the increasingly close link between the real estate market and the credit system dictates that a robust approach to risk estimation and control, through the imposition of risk appetite limits and continuous monitoring of expected and unexpected losses under stressed conditions, can reduce the risk of contagion that can alternately originate from Finance or Real Estate.

Rossella Cappetta, Associate Dean for Open Programs SDA Bocconi and Associate Professor of Management and Technology at Bocconi University, from a different perspective, focused on the relationship and the strong link that exists between people, company and sustainability: "until recently, the company was only concerned with generating value for the shareholder, while now the aim is to get to create shared value between company, people and community." This is why it is important to "seek new solutions in which social and economic value are two sides of the same coin." To achieve this goal, Cappetta hopes that "the players involved will be able to demonstrate that valuing the people and communities of an area is economically viable, especially in the long run."

In the final interview, Andrea Ruckstuhl focused on the opportunities related to urban regeneration, stating that "the evolution of urban regeneration projects over the past few years has led many companies to change their business models in an effort to create value for themselves and the community." Among the main strategies adopted, this includes "seeking an innovative way to bring public and private interests together, using new models and looking for alternative ways to solve complex situations." Since urban regeneration operations are very complex, "a change in perspective is required in order to carry them out, including change on the part of managers. In terms of leadership, in fact, skills should definitely not be left aside, but at the same time new managers must have vision and be able to maintain relationships with different departments, different players, and the whole community. With this in mind, the more people and companies that are involved, the greater the likelihood of success.” What is an example of this? "Thanks to the shared vision and collaboration with institutions, MIND will soon be the first fully decarbonized innovation district in the world, made for

testing solutions for the city of the future, a place of research: Italian excellence, and a shining example in Europe." A remark that filled the audience with pride, who interacted at length during the public Q&A with specific questions on professionalism and leadership in Real Estate with the company's European head, as part of EPFIRE Forum Live, which represents a moment of discussion and debate reserved for Alumni from all classes of the Executive Program in Real Estate Finance and Real Estate, a forum that takes place annually and aims to share research results on the latest trends in the sector, including those related to sustainability issues and ESG values, understood from both the environmental and social perspectives.

Watch the the event videos

SDA Bocconi School of Management