Soil reconversion: MG Real Estate

UPTOWN - VILVOORDE

MG Real Estate is a developer based in the Ghent area and has a focus on logistics properties, which account for around 75% of their business. They are therefore particularly involved with the topic of soil remediation. MG Real Estate CEO Ignace Tytgat introduces his company by pointing out that it was founded at the beginning of this century. One of the first projects was an office building for public transport operator De Lijn in Mechelen, on heavily polluted land and it involved the demolition know-how of the former ‘De Paepe Group’ in its early days. This development, along with others, persuaded the company to move into the development field as a mainstream business. There are now around 70 people in the company, and it is active in the Nordics, Luxembourg, the Netherlands, France and Italy as well as Belgium.

Over the past two years the company has evolved from development alone into investment as well. This means that MGRE takes care of the property and asset management of the buildings it places within its investment fund. MGRE believes that by being an investor they are a better developer because they are closer to the end user client and his needs. They are also able to offer small clients the advantages of high volume pricing by making their asset part of a larger portfolio. Where brokerage is concerned, CEUSTERS has been a supplier for many years and is particularly active for large deals in Belgium, such as the ‘Éclair’ bakery site for Carrefour.

On the topic of the company’s sustainability strategy, Ignace Tytgat finds the terms a little outdated. MG refers to its strategy as ESG and also focuses on being carbon-neutral. The company produces an annual report despite not being listed on the stock exchange. Why? Because in each country within which it operates, sustainability reporting is necessary in order to obtain financing. Nowadays, Ignace Tytgat emphasizes, being sustainable is no longer a choice but an obligation in order to do business. You don’t need to specify ‘green financing’ any more because the only financing available is green. The first genuine ESG company report is currently being prepared for publication next year. This will include medium and long term goals.

MGRE has been developing brownfield sites for over twenty years, well before brownfield reconversion became popular. The company has a great deal of experience, therefore, in dealing with polluted land. The Carrefour logistics property in Ternat was built on a former Sun Chemical, an ink production site, for example, and clearly needed to be remediated before the new construction could be put in place. The land was bought in its existing condition, a typical policy which means that the previous owner does not need to be concerned by the decontamination process. This aspect is entirely taken care of by MGRE. The risk factors (pollution, demolition, permits) are all transferred to MGRE along with the land.

No land is too polluted for MGRE. While decontamination legislation is getting ever stricter, MGRE is investing in internal expertise and training to keep up. Recently, the company bought a former landfill site, and was able to fix the pollution before construction. And indeed, pollution has by law either to be removed from the site or fixed safely in place. More than 75% of the land in MGRE’s portfolio has been polluted, and it is difficult, Ignace Tytgat explains, to find land which has not been contaminated in some way.

On the subject of the danger of ‘greenwashing’, Ignace Tytgat simply explains that the buildings that they construct are genuinely green and certified, and that the question thus answers itself. All of the technical features required by contemporary environmental legislation are integrated into the developments. Clients receive the building along with the BREEAM certificate and with a ‘green’ clause in the contract which specifies all of this.

One of the largest projects in MGRE’s portfolio is ‘Uptown’ in Vilvoorde. This is part of the infamous Renault site, and involves redevelopment into a city district including logistics, offices and residential. A new hospital will be constructed and all of this, once defined by the final masterplan, will create activity and employment. A number of stakeholders are involved in drawing up this masterplan and therefore it is too early to set out exactly what environmentally-friendly features will be included.

The Carrefour bakery ‘Éclair’, on the other hand, presented two different challenges. One was the demolition/de-pollution issue, which is normal for MGRE, and the other is the proximity of housing to the site. The local inhabitants were therefore involved in defining how a green industrial project could harmoniously take its place alongside a residential district. Communication and participation were the keywords, with several meetings arranged with the residents. One of the features was to align buildings alongside the E40 so that existing noise for the residents is reduced. Noise created by the logistics activity is also reduced by, for example, totally covering the truck docking area. Noise is this way ‘contained within’ wherever possible.

MG CROSSWOODS - KRUISEM

While the ‘E’ for environment may be quite clear within ESG (BREEAM…), the ‘S’ for social needs a little more explanation. The company addresses this in a number of ways, including by communicating with local residents. Any new project starts with a discussion of this kind, it is not something which is added in later. MGRE can then go to the local authorities knowing what the desires and constraints of the local inhabitants are and, in addition, what employment will be created.

Despite being so heavily focused on logistics, the most visible ‘MGRE product’ is alongside the E40 motorway in Ghent. Everyone driving along theBrussels-Ostend route is struck by the huge tower which was originally known as the MG Tower, then the KBC Tower, and now the Artevelde Tower. Ignace Tytgat explains that MG has always been active in several asset classes, but explains that where offices are concerned, the market is very geographically sensitive and a detailed knowledge of the city in question is vital. Having always been in and around Ghent, MGRE has this expertise and was able to acquire the land and convince KBC to take it, even without a prior building permit in hand. However, the company’s expansion plans are focused on logistics, for which the geographical location of the product is more obvious to determine. Ignace Tytgat

CEO of MG Real Estate