POINTE-NORD COMMUNITY ON NUNS’ ISLAND FINAL PHASE OF PROJECT NOW UNDERWAY

Construction of the first of two Evolo NEX towers began in November 2022, an important milestone for Proment. The real estate development firm is now on the seventh and final phase of its Quartier Pointe Nord project, which began in 2010.

Located at the northern end of Nuns’ Island, Quartier Pointe-Nord offers its residents an exceptional environment on the riverfront, just minutes from downtown Montréal. The European-inspired development is a combination of high-rise condos, six- and seven-storey mid-rise buildings, townhouses, local businesses, green spaces and active transport, all of which encourage neighbourhood gathering and community spirit.

When the last two towers of the project are completed six years from now, the neighbourhood will include some 2,200 housing units with a total value of approximately $700 million, according to the developer. Proment is the main builder on Nuns’ Island, with a track record of more than 6,000 condominiums and houses.

Called Evolo "NEX", for their connection to the river and downtown, the two towers will be within walking distance of a future REM station. A Nordic spa, a space dedicated to urban agriculture, a garden courtyard, swimming pool, reception hall and lounge are among the common areas planned. Residents will also have access to shared work spaces, including a meeting room, an addition resulting from the pandemic.

"We learned from COVID-19," says Ilan Gewurz, executive vice-president of Proment. "Some units were redesigned to include an office area. And we replaced balconies with loggias, to allow people to enjoy the outdoors longer."

Evolo NEX 1, currently under construction, will feature 258 units with 1 to 3 bedrooms that will be delivered gradually between autumn 2024 and summer 2025.

The company is two years behind its initial schedule because it had to modify its project to comply with the criteria of the new Special Urban Plan for the northern part of Nuns’ Island. Instead of the planned 37 floors, the two towers will be 26 storeys high.

A winning approach

That delay resulted in the first NEX tower units going on sale at a less favourable time for buyers. "We launched sales in September 2022 in a challenging market with rising interest rates and inflation," said Ilan Gewurz. "Nonetheless, half the units were sold within three months. That indicates that buyers understand the value of the project, which is located in a waterfront neighborhood close to the REM and other services."

In fact, 30-40% of new owners have already purchased units in other Proment projects, something not often seen in real estate. The company has been in business for 45 years on Nuns’ Island and has a loyal clientele, some of whom follow the firm from one project to the next. According to Mr. Gewurz, that loyalty can be explained by the business philosophy of the president, his father Samuel Gewurz.

"He always said you have to give buyers multiple reasons to buy by creating value while keeping prices reasonable. And that’s what we’ve been doing all these years."

Stunning views and much more

As for Quartier Pointe-Nord, that approach is based on six principles: maximize views of the river and downtown, design attractive waterfront parks and green spaces, create a walkable community and commercial core, vary housing types to meet the needs of households of all generations, design a green neighbourhood based on ecologically sustainble principles, and provide high quality living spaces and amenities.

Consequently, the residential highrises are thin towers in order to preserve views. "Even at ground level, you can see the river and downtown. People can walk along the riverside or kayak in the water. There’s a bike path and a gazebo overlooking the river. It’s really a neighborhood that allows people to connect with the vastness of the river," said Mr. Gewurz.

The area has been designed to encourage active travel. There’s no need to jump in the car to buy a loaf of bread, because small shops are in the heart of the neighbourhood. "Everything was designed on a human scale," he added. "When you walk down the streets, you’re surrounded by buildings that are only a few stories high, with the towers floating in the background. You can breathe in an oasis of tranquility."

Pointe-Nord is one of the first green communities in Canada to be awarded LEED ND Gold certification. In fact, all Pointe-Nord towers are certified LEED buildings and Evolo NEX is also aiming for LEED certification. Green roofs, sustainable transport (cycling, car sharing, public transit), rainwater recuperation and underground parking spaces covered with parks or courtyards are some of the features that enhance the ecological footprint of this unique milieu.

As a professor and head of sustainable development at HEC Montréal, Jean-Michel Champagne prepares future managers for emerging business issues and the socio-economic challenges of the climate crisis. Having spent a good part of his career in real estate management, he is particularly interested in working with the industry to make it sustainable and responsible.

THE G OF ESG – HOW ARE GOOD GOVERNANCE FACTORS EVALUATED?

The main reason why ESG (environmental, social and governance) factors are now so closely scrutinized is risk management. When we talk about ESG, many people still think strictly about the social dimensions and environmental impact of a company's activities. However, recent examples have shown the extent of the risk of poor corporate governance, for both investors and all stakeholders.

When Habitations Trigone lost its builder's licence in 2021, it sent a shock wave throughout the residential construction industry. The autumn 2022 ruling against Groupe Sélection, which was unsuccessful in its appeal to retain control of its restructuring plan, shed a harsh light on a firm that had appeared to be thriving. South of the border, the State of New York's current lawsuit against the Trump Organization, for overvaluation of its assets in order to obtain loans, should enliven 2023. These examples from the real estate industry have been highly publicized and share a common thread of opaque governance, coupled with a lack of independent oversight and control of management. ESG factors are used, among other things, to identify risks that are not always reflected in financial statements.

Esg Scores

A company cannot determine its ESG performance itself, but understanding how it is calculated allows it to set its priorities. ESG factors are calculated by diverse financial and extra-financial analysis firms and published on specialized platforms such as Sustainalytics (by Morningstar), Eikon (by Refinitiv), Capital IQ (by S&P Global). Each firm uses its own analysis methodology to determine the ESG score of companies. These databases are limited at present, but hundreds of companies are being added each year.

The relevance of the scores remains a hotly debated topic, but ultimately, the components of the ESG score can be used in the decisionmaking of a creditor, investor, customer or business partner. It is important to understand that ESG analyses are based on several sources of data: mandatory data (stock market statements, financial statements), voluntary data (websites and sustainability reports) and involuntary data (media and non-governmental organizations).

Key Governance Factors

The third dimension of ESG, governance, is sometimes abstract. In a country governed by the rule of law, such as Canada, if a company has a good reputation, respects legal frameworks and has never been suspected of a crime, wouldn't putting in place governance controls send the wrong message to investors and lenders? Fortunately, no. On the contrary, it is important that the company be aware of good governance factors, that it adopt best practices and also be transparent, comprehensive and honest in its reporting.

In the specific case of governance factors, they are generally based on three key pillars: good management by executives, investor relations, and the company's sustainability strategy. Each of these pillars is composed of dozens of indicators. Some are nominal (value or percentage) and some binary (conditions met or not). For example, the presence of an executive compensation policy (a binary indicator) will be part of the ESG score, as will the disclosure of executive compensation (a nominal indicator). The composition of the board of directors is also monitored. The percentage of women and people from underrepresented groups (ethnic and cultural) is a factor influencing the score.

There is no magic formula for obtaining a good governance score. Improving the governance of an organization requires a combination of factors. It means integrating the concept into the corporate strategy. That gesture must reflect a strong desire on the part of senior management for its implementation, which might also entail support from a specialized firm.

In summary, the essential elements of the gover nance factor calculation are clear and comprehensive management policies, the adoption of a corporate social responsibility strategy, the publication of a comprehensive extra-financial report, and the adoption of a system of independent auditing and verification of the governance strategy. Those elements are the ones over which a company has the most control and, more importantly, they serve as the basis for analysis by specialized firms. It is therefore a good starting point for launching an ESG strategy.