Australia’s green bank, Clean Energy Finance Corp (CEFC) has committed up to A$75m (€45m) through a new investment mandate with MaxCap Group under its “green real estate finance strategy”, aimed at funding old building retrofit for net zero.

The mandate will target commercial offices, hotels, and retail assets to decarbonise a substantial part of the property sector.

Wayne Lasky, group executive chairman, said: “A green strategy can achieve both sustainability and commercial outcomes for investors. MaxCap is committed to this strategy for the long term. We continue to seek additional institutional capital partners to invest in this strategy.”

Under the mandate, MaxCap will originate, execute and manage a portfolio of real estate loans, aiming to attract further institutional capital to invest in the sustainable refurbishment of commercial buildings.

The mandate will provide senior debt finance for building owners seeking to improve sustainability performance of low-rated commercial office, retail and hospitality assets through repositioning and upgrade works that reduce operational emissions by at least 30%.

The first cab off the rank is Quintessential, a specialist in property regeneration and development. The company will receive A$35m to refurbish a 26-storey office tower at 30 Pirie Street in the central business district of Adelaide.

For this initial loan, MaxCap is co-investing A$35m via the MaxCap Investment Trust.

CEFC head of property Michael Di Russo said: “It is essential that we make our commercial properties fit for a net zero emissions future in the race to decarbonise.

“Commercial buildings in urban centres, suburbs and regional towns across Australia account for around half of the nation’s building stock and many have never undergone energy efficiency upgrades.”

Noah Warren, head assets at Quintessential said: “The extensive refurbishments will considerably enhance the usability and enjoyability of the building for the current and future tenants.”

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