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Value in use: a source of impact projects, at the heart of Novaxia’s business model

This week we met Vincent Aurez, Director of Innovation and Sustainable Development at Novaxia. In this new episode of Urban ChroniclesTM, discover how Novaxia questions the value in use of a real estate asset and conducts temporary urban planning projects with a social impact.

Green Soluce: Can you present the activities of the Novaxia group?

Vincent Aurez: Novaxia is a real estate group led by Joachim Azan, founding president. The group is composed of two subsidiaries.

Novaxia Développement acts as an urban transformer. This subsidiary operates throughout the real estate value chain from sourcing to asset delivery. Its impact investing methodology is committed to the development of territories, people and the environment. This methodology, combined with the skill to give new life to empty and obsolete buildings, makes it possible to meet the challenges of tomorrow’s city. Novaxia puts its expertise at the service of its investors.

Its success on all calls for projects (Reinventing Paris 1 & 2, Reinventing the Seine, Inventing the Metropolis of Greater Paris 1 & 2, the transformation of Hôtel Dieu launched by the APHP) also leads large owners to call on the subsidiary to transform and enhance their real estate assets. Our real estate assets represent 400,000 m² of transformed premises. Nearly 60,000 m² of office space have been converted into housing. This responds to the strong pressure of the housing crisis. 35 projects are under development, mainly in Ile-de-France, for nearly €2 billion. Today, the subsidiary is engaged in regionalization to develop towards other French and international cities.

Novaxia Investissement is a management company approved by the Autorité des Marchés Financiers. It creates and manages real estate investment dedicated to urban transformation: revaluation of urban wastelands, change of use, rehabilitation, etc. The subsidiary’s ambition is to democratize this real estate savings. It recently launched NEO, the 1st SCPI without entry fees (in the event of withdrawal before 5 years, the withdrawal fee is 6% including VAT, 5% excluding vat).

 

Green Soluce: What are the CSR issues you most focus on and motivate your convictions of responsible approaches?

Vincent Aurez: What attracted me to Novaxia was its very special CSR approach at the heart of the group. Our CSR strategy is based on 16 commitments across all our projects, both in asset management and real estate transformation. These sustainable development policies also apply internally to our own management.

These commitments are measurable and measured, with indicators and evidence for each data. These commitments are auditable, and we are waiting for the SRI label in particular. With the help of our association partners, we have developed indicators capable of measuring our impact on the themes of energy consumption, waste reduction and, above all, social issues. Tools have been put in place for all Novaxia employees so that they can systematize the approach.

I will give you three examples. For example, with Aurore, an association that provides emergency accommodation in Ile-de-France, we have developed an indicator on the number of people who have been able to be reintegrated into social and permanent housing after being housed as part of the temporary occupation developed on a site in the 5th arrondissement in Paris. We have thus realized that more than 70% of the people housed have found a home.

A second illustration is the reintegration clauses on construction sites. We have also set up a tool that can be used as soon as you sign a construction contract with Novaxia. A strong commitment by the Chairman and Founder, not only to local authorities, but also to our investor clients.

Finally, in 2016, Novaxia Investissement launched the first responsible investment vehicle to obtain ESUS (“Entreprise Solidaire d’Utilité Sociale”) accreditation in order to ensure this commitment.

Green Soluce: In what way do you think that value in use has become a determining factor in real estate value?

Vincent Aurez: as you have understood, obsolescence is our source. Therefore, the value in use is for us a differentiating element that we consider in the long term. It is part of our business model and becomes our lever for value creation.

We operate on wastelands or assets that do not necessarily have a predetermined use by the local government or other stakeholders. We transform and convert on territories in which we believe, which are in the making. We are convinced of the potential to realize a real estate program that will increase its use value tenfold in the future.

We operate on the different life cycles of the property. So we ask ourselves what its value is at each stage, including during the vacancy period. This allows us, among other things, to carry out temporary urban planning projects with a social impact. Temporary urban planning, involving the temporary occupation of empty or obsolete places, is a formidable laboratory for all the future innovations of the city’s factory. Within the vacant spaces, there is an entire ecosystem of innovative social enterprises, startups and associations making it possible to consider the uses of tomorrow.

Novaxia was the first private actor to develop the concept just after Les Grands Voisins. We called on the same actors who are the pioneers on the subject: the Aurore association and the Plateau Urbain group.

“We are obliged to question the value in use of an urban real estate asset at each stage of its life cycle”

We specialize in the construction of complexes where the social, environmental and gender aspects of the programs developed have an impact.

Green soluce: How do you determine the uses of your urban real estate assets?

Vincent Aurez: If I had to schematize the way we determine the uses of our assets, I would detail them in three points:

First, our internal expertise: our directors and employees have a detailed knowledge and experience of the real estate market.

Secondly, our external partners in the field of real estate, associations and start-ups provide us with ideas. They indicate to us the weak signals of new uses. We can then assemble unique real estate programs. For example, we have developed a hybrid hotel concept: a youth hostel in Buzenval in Paris in a wooden structure with renewable energy production on the roof, which also hosts offices and reception areas open to residents, such as gardens.

Third, we use a lot of data analysis tools. These tools developed in-house are based on big data. They allow us to statistically analyze geographical areas with background trends and for which it is possible to identify a change in usage values.

 

Green Soluce: Can you tell us about a Novaxia project that highlights this reflection on uses?

Hôtel-Dieu

Vincent Aurez: One project that is close to my heart is the transformation of the Hôtel Dieu. This real estate program is extraordinary in terms of urban planning and ingenious financing model. We use the construction lease, which means that we commit to build or improve a property for an owner over a fixed period of time so that he or she can regain full enjoyment of it at the end of the lease. It is a principle that makes it possible to respond to different issues, particularly those of public services.

This real estate program must meet three major challenges: keeping the hospital (1/3 transformed by Novaxia, 2/3 kept as a hospital), modernizing it and financing the renovation (without public funds for the part covered by this construction lease).

We have therefore built a real estate program around three main areas:

  • A “health” centre of approximately 10,000 m² where the first European incubator of biotechnologies, medical technologies and artificial intelligence, supported by Biolabs, will be installed. It will be able to host around a hundred of the most innovative start-ups in these fields.
  • A “solidarity housing” centre will house a 100% social student residence, a disability centre, a patient centre and a community crèche.
  • And finally an “attractiveness” centre with a few restaurants and shops to enhance the attractiveness and animation of this emblematic place on Ile de la Cité.

All this responds to this challenge of modernization, of tomorrow’s city uses in relation to sustainable development and innovation.

Interview by Laura Mauger for Urban Chronicles™.

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Green SoluceValue in use: a source of impact projects, at the heart of Novaxia’s business model
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