Altarea

We believe that global warming will significantly impact housing in the West and, consequently, the real estate development sector in the long term. However, this impact is too distant to be currently assessed or valued.

Altarea is notably committed to adapting to the taxonomy, demonstrating a level of sincerity uncommon among developers. While this does not provide a competitive advantage, it reflects a commitment we value, warranting a 5% “Analyst Joker’s View” bonus.

Property companies typically experience significant carbon emissions at the start of construction, with minimal emissions thereafter. This is also applicable to developments on large land areas, such as car parks. Subsequent carbon consumption is low, as most extensions are minor in terms of square metres annually, whether at constant or current perimeters.

Water and energy consumption are low but remain crucial in showcasing retail property companies’ sustainability efforts. Shopping malls, akin to hypermarkets, are central consumer spending hubs. This setup may optimise the physical flow of goods compared to peer-to-peer online distribution, which involves increased deliveries, transportation, and warehousing.

Similar to oil companies, buyers and tenants are primarily responsible for initial carbon emissions. Altarea’s efforts to optimise emissions align with French law, and it should promote alternative construction methods, such as wood and pre-fabricated structures. However, it is uncertain if these higher-cost constraints align with buyers’ financial capabilities. Renovation could be a viable alternative, alongside citizens altering their habits, as the number of inhabitants per house is at a historic low, while square metres per inhabitant are at a historic high.

By delivering state-of-the-art buildings, Altarea helps optimise heating and air conditioning costs, though this alone does not qualify its business as “green.” The rise of remote work may lead to more decentralised uses, necessitating further land transformation at the expense of centralised offices. In summary, Altarea could benefit from the work-from-home trend. Citizens must adopt positive habits independently.

With 2,000 employees, Altarea is a significant player in French residential development. However, as the company subcontracts all construction work, assessing social issues at this level is challenging.

Altarea has maintained team integrity despite a sharp market adjustment since 2022. To continue this stability, consistent bookings are essential for 2025-26. Management appears committed to preserving the group’s expertise to be well-positioned when the market rebounds. This alignment of interests between shareholders and employees is a positive social aspect.

Altarea designs apartments, indirectly addressing broader social issues such as wellbeing, amenities, co-working, and student residences. As a major provider of affordable housing for non-profit organisations like French HLMs and “intermediate buy-to-let” landlords such as Action Logement and CDCH, Altarea is responsible for constructing state-of-the-art buildings that comply with the latest standards, including RE-2020.