UK - A new ‘low carbon' real estate fund is being planned to refurbish 50 properties in the UK into high specification energy efficient space and offer it to tenants at ‘market prices'.
The Carbon Trust, Threadneedle Property Investments and Stanhope have joined forces to manage the vehicle, which will aim to deliver investment performance by attracting high-quality tenants rather than by demanding higher rents.
The organisations are hoping to raise £350m (€386m) from institutional investors for the Threadneedle Low-Carbon Workplace Trust and aim to raise £100m over the next 12 months.
The fund will offer occupiers refurbished space at market rates, giving them the benefit of reductions in carbon emissions and energy consumption.
The fund expects to deliver investment performance through the increased competitiveness of the buildings by attracting high-quality occupiers and generating secure long-term income, with the added potential for capital growth and development profit.
"We foresee strong interest in this product. There is high demand from institutional investors for property funds which can demonstrate real value added, without undermining long term stability and performance," said Don Jordison, managing director at fund manager Threadneedle.
Tom Delay, chief executive at The Carbon Trust, also added: "This initiative aims to prove that green business opportunities can deliver the secure long-term returns institutional investors demand, which could be the key to unlocking the low carbon economy.
"We want to demonstrate the business case for low carbon property, encourage the wider property industry to follow suit and deliver both an economic and a carbon prize for the UK," he continued.
Through the fund's Low Carbon Workplace scheme, tenants will also receive ongoing assistance to help them occupy the buildings to their full low carbon potential.
Occupiers will qualify for Low-Carbon Workplace accreditation if they achieve a verified per person, per day low-emissions target.
The fund said approximately 40 potential occupiers had already expressed interest in the concept, driven primarily by the perceived reputational benefits of occupying low carbon properties, as well as reduced energy costs and regulatory developments.
David Camp, chief executive at developer Stanhope, said occupiers were looking for more support when managing their carbon emissions.
"We have successfully undertaken a number of one-off low-carbon refurbishments for occupiers who have committed to reducing their carbon emissions," he said.
"Retrofitting existing building stock has been the most practical way to dramatically reduce their carbon emissions and we are confident that LCW will tap into this growing market."