Fidelity International has acquired a central London office property on behalf of a newly created European value-add real estate climate impact fund for an undisclosed amount.
The 99 Queen Victoria Street (99 QVS) asset, which represents the Fidelity European Real Estate Climate Impact Fund’s first purchase, will be refurbished to comprise 88,000sqft of office space. 99 QVS forms a site adjoining the redeveloped One Millennium Bridge.
The fund, which also represents Fidelity’s first Article 9 fund, under the EU Sustainable Finance Disclosure Regulation, makes direct property investments aimed at supporting the mitigation of climate change and the transition to net zero carbon.
The fund aims to achieve its objective by refurbishing and repositioning predominantly commercial real estate assets in Western Europe to deliver sustainable workspaces, Fidelity said.
Fidelity said it expects to hold the assets for three to five years.
Neil Cable, head of European real estate investments at Fidelity International, said: ”While investors can buy new assets built to higher environmental standards, the biggest scope for achieving impact lies in the buildings that exist today, most of which are expected to still be around by 2050. Refurbishing and retrofitting these buildings can both reduce the carbon footprint of our built environment and improve the wellbeing of those who use them.
“Turning brown to green also presents a significant investment opportunity as there is currently a chronic undersupply of net zero carbon space versus occupier demand, resulting in a green premium. This structural mismatch will erode over time but we believe the next five to seven years represent a rare opportunity to deliver disproportionate returns for carefully managed development risk. 99 Queen Victoria Street is one of a series of investments in the pipeline for our new Fidelity European Real Estate Climate Impact Fund.”
To read the latest IPE Real Assets magazine click here.
