During this interview, Agnes Hugot, Executive Committee member of Group Polylogis and deputy CEO of LogisRep, will talk about the way Polylogis is structured and managed . Furthermore, Agnes reflects on the future perspectives for the company, their alliances, and talent attraction.
The main mission of Polylogis is to provide affordable and sustainable dwellings, to create new dwellings, and at the same time manage their current housing stock, all following the current requirements.
The company has a worth of 540 million euros, owns and manages a total of 80.000 homes in a social manner, and manages 65.000 subsidiary homes through a more private system (through Immo de France Paris Il-de-France). The homes are all mainly in the Paris region, Normandy, the center of France, and in Perpignan.
In total, there are 1.500 employees in the company. Polylogis has many f alliances with local offices, these are mainly small entities that manage their local social dwellings. In this way the network of Polylogis extends quite far, but they are always looking for bigger partners to increase the network and to be able to create more building opportunities and serve more households across France.
Polylogis has experienced a lot of growth. Since 2015 the company has doubled in size. A part of this growth is because of the ELAN law – which contributed to the consolidation of the sector. The goal was to create a more focused company instead of having a lot of small local entities, this needed to make the market more efficient and contribute better to the housing need.
The growth of Polylogis was stimulated by her ability to provide a secure financing system for smaller companies, to make sure these smaller companies could build and renovate more. With the size of Polylogis it is relatively easy to attract financing and in this way provide the best means for smaller companies. Bigger entities bring in more dwellings, and that makes them interesting for Polylogis. The enlarged network creates opportunities to provide new dwellings, services and programmes for tenants.
There are several financial streams for Polylogis. One stream is its own rental revenue. A second stream is a fund that is made up from money deposited by the French, following a special account, Livret A. This money is used to finance companies with a social mission, and the money is managed by the Caisse des Dépôts et Consignations (CDC) state-related bank. A third money stream is funding from e.g. government entities, banks, and other partners.
Polylogis remained stable through the Covid-19 pandemic. During this time the organization could still pay the RLS tax, which requires companies to hand over 5-8% of their yearly revenues. This RLS money needs to be reinvested into the sector, safeguarding the social mission (as goes for all the revenues in the social housing sector). The financial resilience of Polylogis makes the company an attractive financial partner.
A lot of the portfolio of Polylogis is around 60 years old, stemming from the years when the company was established. This creates difficult dilemmas: do you renovate these buildings or demolish them and build new ones? An important aspect in this decision is the need for a lower CO2 emission. Right now there is a focus on refurbishings buildings, making sure to use bio materials and reducing the emissions of the buildings.
The holding company of Polylogis is LogiRep. This holding company has a two-tier board. Firstly, a management board that runs the company, makes decisions and introduces these decisions to the supervisory board for approval. This supervisory board is required by law, and looks at strategic angles, maintains the mission and looks at sustainability. This second board is made up of e.g. tenant representatives, employees and shareholders.Lastly, there is a strategic board, mostly composed of former CEO’s. This board safeguards the continuity of the company.
There are a lot of regulations in the social housing sector. There are audits from a separate body, a lot of laws to implement, different financing principles and mandatory reports about assets, revenue (public and private) and investment information.
The federation for social housing (L’Union sociale pour l’habitat) is an important actor, as it stands between the associations and the government. The federation mediates between government and associations and represents the same social mission all associations share.
The future strategy for Polylogis is to actively increase in size in order to remain an attractive and competitive actor in the French social housing sector. This size increase is also in line with the aims of the earlier discussed ELAN law, and supports a more efficient operation and development of social housing assets.
What Agnes adds, is that the ELAN law is not very effective yet. The government allowed associations to come together under, often newly created, holding structures (Société Anonyme the Coordination (SAC), and not actually merge. This means that the aim for more efficiency will not be reached, as the number of social housing associations is still as large as before, or even larger and more complex
Alliances, Human Resources, Talent Attraction
Talent attraction is a difficult thing in these times. Young employees want flexibility and are used to moving on after a few years – while Polylogis’ employees are traditionally used to working for an employer long-term. This means that Polylogis has to change its approach to talent acquisition and match the demands of a very competitive employee market.
Besides this, the companies which form Polylogis, still operate under their former names, which does not help the employment process.
Polylogis is looking at the future, to attract new businesses, invest in digital ways of asset management and increase their services. The focus is on providing more than housing alone, and catering to specific needs. Chosen groups for these services are the elderly, young people starting in the market, and students. This services platform will be a combination of internally organized solutions and collaboration with external partners.