Patrizia Global Partners, a fully owned subsidiary of the Patrizia Group, has launched the first ever Patrizia product dedicated wholly to impact investing.
Dubbed the Patrizia Sustainable Communities I SCSp-RAIF impact investment fund, the vehicle has already attracted €125 mln in seed equity as part of its target to raise around €500 mln in capital.
Said Marleen Bikker-Bekkers, fund manager of Patrizia Sustainable Communities: ‘It’s very exciting from the outset to have very clear goals around creating affordable and green real estate with a social infrastructure dimension.’
The fund plans to provide thousands of affordable homes, including social housing, and additional social infrastructure, such as public libraries, day care centres and healthcare facilities. It is targeting underserved communities in around 25 locations in and around major European cities.
Its classification as an impact investment fund derives from the fact it will provide homes for key workers who cannot afford to live close to their workplaces, and for people on the social housing waiting list.
Sustainable credentials
‘As a fund, Patrizia Sustainable Communities is not only closely aligned to SFDR - Article 9 in terms of its sustainable investment goals but in terms of Article 9’s robust disclosure requirements. The fund, which is also fully aligned with the UN SDGs, provides a dual return to investors. This dual return consists of an attractive financial risk adjusted return, on the one hand, and measurable positive social and environmental outcomes, on the other,’ said Mathieu Elshout, the fund chairman and Patrizia head of sustainability and impact investing. ‘Patrizia’s ambition is to become a leading global impact investor in the real assets sector with a meaningful part of its AUM in impact investments by 2035.’
The fund’s raft of projects is expected to comprise a balanced mix of development initiatives, and repurposing drives. ‘In some cities, there are already buildings in place, older structures that we can convert, and the intention is to do so where possible. But development is also essential to create this product,’ Bikker-Bekkers said.
Added Elshout: ‘Realistically, this is what is needed to deliver the volume of affordable homes required. We can’t just do it with existing stock. But there will be a lot of attention on the sustainability of the product we build. This is very much in line with Patrizia’s goals to achieve net zero carbon status across our corporate operations and real estate portfolio by 2040 at the latest.’
Community creation
Affordable homes will not only be delivered as standalone projects, but also created as part of bigger schemes. ‘We are building sustainable communities,’ Bikker-Bekkers underlined. ‘In some locations, it is possible to make a small investment where you only do the social part, but we are looking at investing in lots of of locations in combination. We’re interested in investing in places where there is an affordability issue, where we can work with housing associations, serve special groups of people, foster intergenerational connections. The variety will reflect the broad range of urban locations we will be tackling.’
Said Elshout: ‘It’s important to remember that affordable homes are the focus of the fund. It’s not a by-product, as you see in many BTR developments, where they are obliged to do so as part of the planning consent. This is our main goal and focus.’
In the first closing of the capital raise at the end of 2021, two Danish pension funds, AP Pension and PKA, provided the fund with a total of €125 mln in equity to coincide with the closing of the first seed investment.
The fund’s debut project will be an ambitious social and affordable housing scheme in Dublin, Ireland, including the ancillary provision of social infrastructure - potentially a library, a creche, and a community centre. ‘There are over 60,000 people on the social housing waiting list in Ireland and affordability is a major issue,’ Bikker-Bekkers said.
‘For this first project, we will provide 290 social and affordable apartments, aimed at improving the quality of life of its residents by making them feel part of a vibrant community. The apartments will be certified to the highest green real estate standards.’ She added: ‘We are in a good dialogue with a further group of international investors to follow the example of AP Pension and PKA and join our equity raising initiative so we can further increase our sustainable impact across European cities.’
