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The EPRA study examines how real estate investors perceive and incorporate social impact into their decision-making processes, in a context where sustainability has become a key priority in the social sphere as well. In recent years, interest in responsible investing has grown significantly, and expectations regarding the real estate sector have evolved. While environmental metrics are now well-established, a gap remains in the ability to measure and assess the social impact of real estate investments ex ante, with the industry needing to identify criteria and indicators useful for evaluating these impacts.

To explore this aspect, a survey was conducted among financial and sustainability managers working in the European real estate sector. The survey focused on the concept of “social impact” and measured respondents’ willingness to forgo a portion of expected financial performance in exchange for concrete social benefits, such as greater affordability for tenants. Analysis of the collected data reveals that the professionals involved are willing, on average, to sacrifice 123 basis points of expected return to improve affordability. This “sacrifice” increases if the impact is certified, if a long-term perspective is adopted, and among those who adopt more responsible ESG approaches.

The willingness to forgo returns varies depending on the type of social impact: it is significantly higher when it comes to reducing rental costs, but decreases in the case of improvements related to occupants’ well-being (e.g., through retrofitting initiatives). This suggests that to promote real estate investments with social impact, it is essential to clarify and certify the impact itself, defining shared and measurable criteria.  Although social impact is a lower priority than environmental impact, therefore, there is a genuine openness on the part of investors to integrate social considerations into their strategies, provided that the benefits are concrete, quantifiable, and recognized by the market.

Download the report here