Profile: Milan’s landlord focuses on the green agenda

Manfredi Catella, CEO and chairman of COIMA, Italy’s biggest private real estate manager, tells Impact Investor how he is changing the face of Milan with a “genuine sense of caring”

Manfredi Catella, CEO and chairman of COIMA, describes fighting climate change as a “must do”. But one he takes very personally. “I think that sustainability should be firstly driven by a genuine sense of caring. Cultural values are the fundamental roots to ‘act well’.” 

He mentions his studies at Catholic institutions, together with solid family values as drivers for “naturally integrating sustainability into into my day-to-day decisions”.

COIMA is Italy’s largest private real estate company, built around the acquisition of Hines Italia in 2015. Catella says: “As developers, we’ve always been very much conscious of sustainability and had a focus on social and environmental impact. 80% of our €8.4 billion of assets is already certified environmentally.”

Catella speaks of the holistic vision of COIMA Roots, their sustainability strategy, “developed with the Principles of Responsible Investments and eight of the United Nations SDG Goals”. Sustainability performance is measured using the firm’s proprietary analysis too, the COIMA City Lab Charter, which the company established in 2019 in order to “provide measurable objectives and a scoring system to track a project’s performance”.

COIMA’s vast Porta Nuova district in Milan “is the first whole neighbourhood [in the world] that qualifies for environmental certification from LEED and community certification from WELL”.

LEED is a voluntary energy certification originally developed by the US Green Building Council and increasingly popular in Europe. WELL is “the leading tool for advancing health and well-being in buildings globally”.

COIMA also developed the eye-catching Bosco Verticale in Milan’s Porta Nuova, a pair of residential towers which contain more than 900 trees on 8,900 square metres of terraces.

Catella says it has become an iconic symbol of sustainability which he believes “has done much to encourage the green development of buildings and to set the bar higher”. 

Impact investment matters now

The EU’s Regulation 2019/2088, which regulates sustainability-related disclosures in the financial services sector, turned out to be a turning point for COIMA. 

This was “a major regulatory sea change, and each of us had to decide whether to comply or not. I believe we were the only Italian real estate company at that stage to comply. Deciding that meant transitioning from being a company that simply consciously tried to avoid negative environmental impact, to one where sustainability is at the very core of what we do”. 

He adds: “It has pushed the entire organisation towards being impact-driven with an integrated approach ultimately involving each single employee. I can tell you it has had a profound effect on how we do business. The whole organisation will now become focused on the green agenda.”

Catella continues: “We were the early adopters who were encouraging [investors] to think in this way. However, it was noticeable when we launched our first impact fund to investors that we found them refocused on these issues and that what we were talking about was very relevant. Impact investing matters now.”

In 2020,  COIMA launched its ESG City Impact Fund. It received equity commitments of around €400 million from cornerstone Italian institutional investors including Cassa Forense, Inarcassa and Cassa Commercialist, the pension funds for lawyers, architects and chartered accountants, respectively. 

The fund has “an open collaborative structure including co-investments, partnership and financial leverage,” and a total investment capacity of over €4 billion. With a 20-year life span, it aims to deliver a 10% IRR and a 5% dividend yield.

Its mission is to “support Europe’s overall ESG initiatives in order to build a more sustainable economy”, with a focus on decarbonisation, occupation, inclusive neighbourhood and building design, and accountability and transparency in reporting.

Impact and returns

Not surprisingly, retrofitting is a major focus for Catella across his portfolio. “I believe the upgrading of existing buildings is fundamental to achieving the overall objectives of fighting climate change in real estate. As of today, I would say all developments are divided roughly 50/ 50 – retrofitting existing buildings and building new within ‘dismissed’ industrial areas.” Porta Nuova is very much an example of this. 

This has meant a strong dialling up of social impact considerations. “As soon as we finished developing the Porta Nuova neighbourhood, we started looking at the way in which we were going to operate it and improve the management.”

“This has led us to the setup of a digital infrastructure that helps us to reduce energy consumption and improve the experience of the user.” Working with consultancy firms McKinsey and Accenture, COIMA is developing a digital platform and app which will give those using the buildings useful information and a better experience. The app will collect and analyse data “helping us to reduce costs and emissions, and to make the user experience more enjoyable and effective”.

“A vital part of managing this neighbourhood has been our collaboration with the Municipality of Milan to take on the management and care of all of the public spaces including the BAM park being the main place for social interactions. Our ultimate goal is to make the Porta Nuova neighbourhood a ‘best practice’ of urban regeneration and operation driven by a happier community.”

As well as ESG deliverables, Catella is motivated by “a better risk/economical return for our investors. We have the privilege of a fiduciary partnership with long-term investors who are focused on preserving and enhancing the value of their investment in the long term, supporting investments which would not be possible with a short-term view driven by financial returns only.” 

COIMA’s decarbonisation plan is an important part of this. “It is investment that ultimately will hedge against [future] carbon taxes and align with the evolving demand from end users. Making the entire community vibrant will make our tenants ‘partners’ in the district, and it will make their employees more loyal to them.

“Tenants undoubtedly will appreciate our ability to support them with their ESG targets through our data and management. By ‘activating’ the whole neighbourhood with cultural or civic events, you can increase footfall which has real knock-on benefits to retail and hospitality tenants. This will ultimately compensate our investments in higher rental values,” he adds.