2019 Sustainable property Xavier Mertens, CEO Inclusio

Combining strong social objectives and a fair return: Inclusio’s challenge.

Real estate company Inclusio invests in social housing properties. Its unique model combines a strong social objective with a fair return. In partnership with public operators such as social housing agencies, Inclusio forms part of the answer to the problem of the shortage of social housing in Belgium.

What challenge was the source of inspiration for your project?

In Belgium, the need for social housing is extremely high and demand is constantly growing. In Flanders, in 2017, there were 135,000 people on waiting lists. A year later, there were 20,000 more. And the situation is similar in the other two regions of the country. Parallel to this, public authorities no longer have the necessary resources to invest in social housing, as they did in the ‘60s and ‘70s. Besides, they have to renovate their housing stock, which is often run down. As a result, they’re no longer able to meet the demand for social housing alone.

This is the context in which we developed the Inclusio model: a real estate investment company with a social purpose.

In what way is your approach innovative?

Since its creation in 2015, Inclusio has proved that, in the real estate world, it’s possible to combine a strong social objective, fair return and low risk. That’s something unique and new in the sector. No real estate company in Belgium is pursuing such a social objective.

How do we do it? We purchase or build apartment blocks. Then, we lease them under very long-term leases to public operators such as social housing agencies (SHAs), for a rent about 25% to 30% below the market rate. The SHAs then let the apartments, for an even lower rent, to households waiting for affordable housing.

At the same time, we work with not-for-profit organisations so that around 25% of our housing benefits the most vulnerable, such as migrants, the homeless or people with a disability.

What impact has Triodos Bank had on your organisation?

In order to continue to develop our real estate portfolio by purchasing or building new housing, we need to constantly expand our financial resources with new sources of finance. Triodos Bank enables us to do this through the loans it has granted us for more than a year now. The fact that an ethical bank like Triodos has confidence in us is further proof of the credibility of our social model.

What impact has your organisation had on your business sector?

Compared with the social housing sector as a whole, we are still a modest operator. We have a stock of 410 units, but are aiming for 3,000 social housing units by 2025. In the medium term, our role is potentially very significant since the needs of the sector are extremely great. Inclusio is part of the overall solution which we hope to gradually provide for Belgium’s social housing problem.

What impact has your organisation had on the community?

This can be calculated in different ways. The first criterion is the number of affordable homes we put on the market. If we meet our 2025 target we will have helped 3,000 families in need! The second criterion relates to our strong social objective: to make some of our housing stock available to the most vulnerable, such as migrants, the homeless, etc.

How does Triodos Bank share the vision behind your project?

Triodos Bank and Inclusio are certified B Corps: they fulfil strict ethical, environmental and social criteria. We share common values and pursue a societal objective in everything we do. In the real estate sector, what distinguishes us from a conventional operator is that we only get involved where an operation has a social aspect. That’s our number one selection criterion. This aligns us very naturally with Triodos Bank, which follows the same approach for its banking operations.