Feldberg Capital, via its recently acquired London real estate investment management business formerly known as Brunswick Property Partners, has reached first close on ReForm, a brown-to-green workplace fund.
Aiming to provide a firepower of £500 mln (€579 mln), the fund will target amenity-rich central London zone 1 locations with excellent connectivity and strong growth characteristics, such as Soho, Fitzrovia and Marylebone.
The fund has received significant backing from a cornerstone UK institutional investor and has a current fundraising target of £300 mln.
David Turner, head of investment at Feldberg, said: 'With the tightening of MEES regulations and a significant proportion of existing stock suffering from poor energy performance and increasing obsolescence, coupled with increasing occupier demand for high-quality workplace, we are seeing a significant opportunity to acquire discounted real estate and apply our unique skillset to create best-in-class green workplaces.'
The office sector is undergoing a significant structural shift with a growing division between best-in-class green workplace assets and older, less energy-efficient offices, Feldberg notes.
This, in addition to the current challenging macro-economic climate, has created an attractive buying opportunity for Feldberg to apply its brown-to-green asset management expertise and deliver stock into a market experiencing a significant scarcity of green ESG-focused workplace assets.
This will be one of the first UK funds to link a proportion of the manager’s performance fees to pre-determined ESG targets, creating significant alignment between investors’ ESG ambitions and financial returns.
Feldberg has a successful track record of London-focused investment ventures, including Akoya, a £550 mln London neighbourhood workplace strategy in partnership with a global sovereign wealth fund focusing on sustainability, occupier wellbeing and local community.
Will Amies, head of business development at Feldberg, added: 'In a challenging market environment, securing a cornerstone investor reflects the relevance and appeal of our latest venture and the confidence of investors in our abilities and track record.
'With a constrained future development pipeline, energy efficiency regulations looming and occupier requirements evolving, this fund is perfectly positioned to take advantage of this opportunity. We’re now in active discussions to raise further funds from local government pension schemes, UK multi-managers, corporate pension funds and other professional investors as we look to create a war chest to target a space rich in opportunity.'