Alain Taravella (Altarea) : "Nous avons réussi, sur le logement, à faire mieux que le marché !"

We are a city company. We build the city for everyone. We build the city for the French so they can go to shops, work, so we do all the necessary products. And we like to cross borders. That’s a developer, but we’re everything at once. Yes, we do everything and we are happy like that. And I think we can work on different markets, and what’s important is the product, the real estate product that we make in various forms. Let’s begin to summarize.

It had to happen. Yes, it was an interesting year. It started very well in January and February, then we suffered the pandemic like everyone else. But what is interesting is that it made us see what is essential and what is accessory. Of course we suffered like everyone else for a few months. The French had other things in mind than buying apartments. They couldn’t go to shopping centers, couldn’t go to work in their offices. So of course that happened. But the pandemic – I’ll be a little optimistic – will not last forever. So what we observed once the shock passed is the interest in real estate products for the French. People started buying apartments again, and we saw that housing was resilient, even for commerce.

Of course we had a bad year for commerce. But what we observed is that as soon as shops reopened, the French were there, they went to shopping centers. It’s nice to buy on Amazon, but going shopping is also very good. And we also saw that everyone talked about teleworking, it’s true that it is quite widespread, but we observe that employees also like to come to the company, but we need to organize their work differently.

I wouldn’t say difficulties in commercial real estate, I would say delays. For example, we are building the headquarters of Orange, which is not far from your house on the other side of the Seine. We didn’t deliver it in 2020, we are delivering it today. So that impacted the 2020 accounts but will increase the 2021 accounts. So when we look at our revenue, it dropped by 1.5%, but housing increased, commercial will of course decrease. The housing branch grew by 22.5%, while the overall housing market dropped by 30%. So we managed to do better than the market. I won’t say we did better than others, but that’s how things are.

Commerce: we suffered and still suffer. 40% of our shops are closed today, 60% are open. The 40% closed are those in shopping centers over 10,000 square meters. That’s how it is. But what is very interesting is that those that are open are outperforming. People come less often but buy more. That’s what we achieved. And it’s completely true. I think we realized with these crises that our products pleased our clients. The housing branch is three quarters of the group’s results? No, half of the group’s results. It is growing in 2020, which is quite spectacular. We see that investors are there. A new element is that institutional investors are returning to housing, buying apartments to rent. So that’s very good. And individuals bought a bit less. Before the crisis, 60% of our clients were individuals, 40% institutions. In 2020 it reversed. I think we’ll go towards 50-50 in 2021, which suits us because selling to institutions brings less money but with less risk and finances the entire production.

No, I am not optimistic in the short term. If there is a total or partial lockdown tonight, it won’t help our business in the coming months. What I look at for our business is a long-term vision. Are the French going to need our products in the long run? That gives me optimism. It’s a vision – I see 2023, 2024, 2025. I know that the French will want housing. I know that if we adapt offices, adapted offices will still be useful. I know that new commerce can be created. That’s what I see. In 2021, clearly the first half will be bad. We said that when we published our accounts. The first half will be bad. How else can we say it? And we hope, like everyone, for a rebound in 2021, but for the second half. Overall, 2021 will be better than 2020 anyway, unless we’re locked down all year. We’re not there yet, fortunately.

We have always had 20… less far from city centers, with outdoor spaces. That’s a real underlying trend. That’s completely normal. But before the crisis, we surveyed our housing: 93% of the housing we produce had outdoor spaces. So 7% didn’t. We will try to improve that, but we were already on that before the crisis. The outdoor spaces vary from 2 m² to small gardens or terraces, but always outdoor spaces. When we look at offices, all our offices have outdoor spaces. So we already took that into account. But of course, the French will probably move a bit more to medium-sized cities and peripheral towns. We need to build more in those towns. But there will always be people who want to live in the metropolises. So things will change, but for us it’s great when things change well, there are new markets. So there will be a new way of building new housing. There are two things: one, we will have to go to cities where we maybe weren’t, medium-sized cities; two, it’s cheaper, land is cheaper, apartments will be cheaper. And for people who will telework from afar, it will be better. What will change things a lot is the new RE2020 regulations that will come out, which will force us to build more eco-friendly with less carbon footprint. That will be an innovative element in what we will do in the coming years. We will have to adapt and fight against global warming. These new buildings will be more autonomous, less energy-hungry, more intelligent, more connected, built with wood. We bought a company called Woodeum two years ago that builds only in wood. So there will be more wood, more low-carbon concrete, more insulation. Yes, all that. And of course, environmental concerns. Last year we sold 12,000 homes, a little less than 1,000 in wood, and that proportion will increase.

For us, once the election is over, generally… I think there is something that is not well taken into account: the need for housing for the French. The French need housing. There are many people arriving, single-parent families. We need more housing. To build housing, you need a permit. Many mayors are reluctant. That’s not a new problem. Today, a mayor who is rather a builder told me, ‘Now my fellow citizens are not asking me for housing, they are asking me for bike paths and urban forests.’ So we have to reconcile these two demands. There is this ecological approach, which is not just for green mayors, it’s for everyone. Everyone is becoming aware of what needs to be done. And today it’s true that there is a bit of a brake. When things are not going well in France, regardless of political sensitivities, this brake is there. But we have mayors who want what they build to fit well into the landscape. We do too. There is no contradiction. But we need to rethink how we work. We work differently, but we have to build somewhere. So we cannot say we don’t artificialize, we don’t build higher, we don’t build. So we need to densify, build higher. That’s necessary. And some mayors are for it, some are not. But we’ll get there. It’s more difficult, but we will get there. You know, I often say that our business must serve the general interest. The general interest evolves, and we must continue to serve that interest, understand what citizens want, and provide them with housing because they need it, and also provide bike paths and cycle lanes.

I don’t have fundamental criticisms to make of the government’s housing policy. The government builds housing. The subject is that the decision-makers are the mayors. Mayors sometimes have somewhat different perspectives. As for us, we find it harder to get permits, but we do get them. And as of last Thursday, we sold more homes than before. So it’s harder to get permits, they cost more, land costs more. You have to fight to get permits, and they cost more. So prices go up a bit. But once again, we need housing. In terms of supply, it’s a catastrophe. But we still managed to meet our objectives. 2021 will be harder, but we expect 2021 to be better than 2020. So it’s hard but we will get there.

Today there are 3 sites. That’s what I mean. And if it works well, there will be more, we hope. First step.

I dare say the open plan office is always there, but we have to adapt it. We have air conditioning systems that make it possible to be in open plan. I don’t think the open plan is dead. It will continue, but it’s always the same: we may need to make them more comfortable and ensure people are better than before in offices. It’s clear that offices are no longer just machines for work. They are places where we come together to work together, to discuss, to talk. It’s a change in mentality. This crisis is generating a change in our way of working. From that point of view, we also see ourselves reuniting in Calais? Where often you go to the office because you have to go there, but now you go because it’s good, because it’s useful, because we collaborate and exchange. What I observe is that even before the pandemic, the office had to be attractive. Young people… not everyone’s favorite option is teleworking. I don’t deplore it. I lived in the last century, so the 21st century is different. Young people especially need to find an interest in going to the office. You have to sell the office, not force people to come. You have to want to come. Today our offices are pleasant. We have to retain our employees so they want to come. We are normally in teleworking, but you see, some come anyway.

No, we are currently discussing leases for the tower. We haven’t signed leases yet, but we are in contact with a number of clients. I prefer to say that we have signed, for example, cyber defense, which brings together large state companies like Orange, Thales, etc., chose our tower to create the cyber defense hub in France. So we managed to satisfy them. It’s a 25,000 m² tower. Regarding the number of vacant office square meters, there are many press articles about La Défense saying that the number of vacant square meters is exploding. Is there this issue today at La Défense of an abundant supply? To put it mildly, there is an abundant supply. There have been crises at La Défense in the past, highs and lows, cycles. We are in a cycle, rather at the bottom of the cycle. There will be price adjustments and La Défense will fill up again through price adjustment. That’s the market.

A company can only live through development, and Altarea has been very active for 25 years and has grown constantly. We started from zero and now we’re at 3 billion. We won’t stop there. We will continue through internal growth, of course, but also through structuring or de-structuring acquisitions. That is still possible. That will be the opportunity to talk again later. Thank you for having us. Alain Taravella, chairman and founder of the Altarea real estate group, guest of the big live interview on Boursorama. Thank you.