Fidelity International has raised €200m (£172m) in the first close of its second real estate climate impact fund.
The Fidelity Real Estate Logistics Impact Climate Solutions Fund focuses on logistics in Western European countries, with a strong bias towards France, Germany, Netherlands and the UK. It will take a value-add approach of acquiring existing assets to refurbish and reposition as high-quality schemes that can be operated at net zero carbon.
Rest Super, one of Australia’s largest profit-to-member superannuation funds, is a cornerstone investor. It is committing €80m to the fund at first close, with an agreement to commit up to a further €120m to the fund over the subsequent closes.
According to Fidelity, brown logistics buildings are trading at an attractive entry point, 20-30% below peak valuations in 2022. It added that Western Europe benefits from multiple demand tailwinds, including the continued growth of e-commerce and a post-pandemic focus on supply chain resilience.
With supply of quality logistics assets constrained, Fidelity said it expects further strong rental growth for well-located, green warehouses.
Andrew McCaffery, co-chief investment officer at Fidelity International, said: “Following a strong first close, investors will have the opportunity to invest in the fund’s second close towards the end of the year.
“With approximately €550m of deployable capital within our real estate climate impact strategies, we are excited by the opportunity to take advantage of current market conditions and deliver strong returns as well as tangible carbon reduction within an accelerated time frame.”
Andrew Lill, chief investment officer at Rest, said: “We believe its focus on climate impact offers a fantastic opportunity to benefit Rest’s approximately two million members, including the more than a million who are younger than 30 and will retire into a post-2050 net-zero world.
“With logistics properties trading at attractive rates and demand for energy efficient facilities growing, we believe the LOGICs fund will drive rental yields and property values that should translate into strong financial returns while helping to speed up the path to a carbon neutral economy.”
The news follows the launch of the Fidelity European Real Estate Climate Impact Fund at the end of 2023.
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