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Redman x Extendam "If we don't do what is necessary to elevate buildings to a certain standard, they can lose value and liquidity"

Nicolas Ponson, co-founder and co-chairman of Redman, and Bertrand Pullès, co-founder of Extendam, discuss the partnership they decided to establish between their two companies. They are united by one ambition: to participate in the better development of hospitality in the country.

The Redman Group

"We created the Redman Group 15 years ago. It is a real estate development group that was created on the principle that dealing with complexity creates value. Creating a group focused on the treatment of complex objects allowed us to exist in a market in which the rankings are rather purely financial. 
In 2013, we tackled hotel operations because since the launch of our business, we had been designing, building and developing hotels. We realized that the chain of value creation in the hotel industry goes first and foremost through the business.

We wondered about the "why" of our approach and the "how". After much reflection, we concluded that we were doing certain things without expressing the source. We wanted each of our actions to have a social and environmental dimension. What we do is not just about "spreading m²" and making beautiful facades. What is important for us is the project. When we make a building so that the project it houses is revealed, it starts to make sense. We created a company with a mission without knowing it. So we wrote down our ‘raison d’être' to arrive today at a company totally imbued with this state of mind.

We have developed a group of 200 people with a common link between our three areas of activity: taking care." 

Extendam 

"Extendam is an investment fund whose objective and conviction is to support entrepreneurs in their development and acceleration. It's a story of people, we are now 40 people and our team accompanies the entrepreneurs. I hope to reach the symbolic figure of 300 hotels purchased by the end of 2022, as we currently have around 225 hotels in our portfolio, representing approximately 3 billion euros in asset value for 1 billion in assets under management."

The Extendam x Redman partnership

Bertrand Pullès: "We had the opportunity to meet Nicolas and Mathias [the two founders of Redman] and we got to know each other without taking any particular action. A climate of trust and pleasure was created and we were also able to meet the teams, which allowed us to understand the values associated with Redman.
We were able to find all these human values and the company's approach in some of the projects we worked on together.
Our ambition is to work on a long-term basis with the partners we work with. It is quite rare to find a partner developer with this dual culture: construction and a hotel site. This has enabled us to work together and look at opportunities through a different prism than other partners. 

Outside of development, we are seeing more and more buildings to be rehabilitated. In particular through use and operation with the aim of increasing revenues per square meter. These are investments that we are going to have to make in buildings to make them more ESG compliant, but also more fluid in the coming years. If we don't do what's necessary to bring the buildings up to standard, they can lose value and liquidity in the years to come. So it's also our job, on behalf of our investors, to be extremely vigilant on these issues."

Nicolas Ponson: "Our partnership with Extendam supports this first phase; it is not only a key player in the market but one of the leaders. It is a way for us to validate what we have done with a reference operator. Now that we have shown what we can do, we can accelerate.
We have a real estate development vehicle and an operating vehicle and both must be totally independent and in their own market.

This partnership also allows us to have a third-party eye to ensure that our reading grids are the right ones."

Bertrand Pullès: "This third-party perspective is also interesting for us in terms of promotion and the conversion of buildings and our hotels. These are elements that we are looking at more and more. There is a real market today with real opportunities. Hotels may have been well built, need to be brought up to standard and we need to create, through all the new uses, new activities in these buildings. And that's either by mixing uses or by totally changing the use of the hotel. Redman's view is therefore interesting not only on the operational side but also on the works and feasibility side.

Nicolas Ponson: "There is a very important complementarity, we are not intended to be an investment fund, but the ability to read the market and identify and read the opportunities, on both sides, allows us to draw on the skills. This, I believe, can only create value.

Bertrand Pullès: "Today, there is no such thing as a simple file, and it is also important to be able to be extremely reactive when analyzing a file. The complementary nature of our views is extremely valuable.

Nicolas Ponson: "It's also a way of supporting the transformation of cities. The hotels in our portfolio or that we are studying are in a city that has evolved. Cities evolve, but so do their uses — very quickly. So we are constantly rethinking the use of an asset.

Bertrand Pullès: "We also need to have a practical look at a property by rethinking how to animate the common areas, how to optimize the use of the rooms, but also the targets, short or long term. When we see a subject, we must not prohibit ourselves from doing anything."

A vision of CSR 

Nicolas Ponson: "From the moment we positioned ourselves as a player with an extremely high level of requirements, we believe that we have to be among the precursors and ahead of the curve on all the regulations. We want to position ourselves as players who will open the doors on these subjects. We have a commitment, a way of apprehending each of our actions by questioning the virtues and benefits that they can generate.

With this approach we can consider that we have done "our part" to stop damaging the planet and if possible reverse the system. It is also an extraordinary employer brand. Finally, it is positive for economic development. Access to financing is becoming more difficult and will continue to do so for those who do not meet these criteria. I understand the financiers, when they project themselves at the end of the loan, if the asset is not virtuous today, what will it be in 15 years?

Finally, a company manager looks at the valuation of his company and a company that does not take into account these elements today, will it still be in 2 to 5 years? What will be the reading grid of investors? These are very long processes, if we don't take them into account today, by the time we judge them, it will be too late to do so.”

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