Feldberg Capital has raised £50m in the second close of its ReForm impact fund, which focuses on decarbonisation and regenerating brown offices to green workplaces.
The latest close brings the total fundraise to £100m since it launched in October last year. The impact fund is targeting a total equity raise of £300m, which will provide firepower of £500m including leverage.
The ReForm fund invests in energy inefficient “brown’ offices and uses Feldberg’s ESG framework to retrofit and reposition these assets into modern green workplaces. It targets properties in Zone 1 locations including Soho, Fitzrovia and Marylebone.
It completed its first deal for the fund in December, when it bought 8 Bloomsbury Street, WC1.
Feldberg said it will continue to seek similar deals and expects more transactions to be completed throughout 2024.
The fund is one of the first in the UK to link a proportion of the manager’s performance fees to pre-determined ESG targets, to align investors’ ESG ambitions with financial returns.
Individual asset-specific “science-based targets” will also be set for reducing carbon emissions, so that they are as environmentally friendly as possible in operation.
Each ReForm asset has a local charity partnership that will be supported, developing initiatives such as renewable energy, spaces for and support with charity events, or funding for their causes.
Feldberg said an attractive buying opportunity has arisen from a “significant structural shift” in the office sector, highlighting the growing division between best-in-class green workplace assets and older, less energy-efficient offices.
Will Amies, head of business development at Feldberg, said: “The successful second close of ReForm underscores our and our partners’ dedication to driving positive change in London’s office sector by decarbonising buildings while delivering social benefit and positive community impact.
“With backing from major investors, we are well-positioned to leverage our expertise in brown-to-green asset management and deliver impactful ESG-led results at a time when market dislocation is creating a once-in-a-generation opportunity to invest in some of central London’s best commercial real estate assets at attractive values.”
David Turner, head of investment at Feldberg, said: “London is busy and thriving which is positive for offices, but employers realise that in order to attract their workers back long term and to attract the best talent, they need to provide high-quality space in the best locations that supports employee wellbeing.
“According to Knight Frank there will be a 16% increase in UK full-time undergraduates in London between now and 2030, and when these younger socially conscious individuals enter the world of work they will want to be in ESG-led workplaces with thriving amenities on the doorstep. This is the kind of workspace ReForm is setting out to create while having a genuine positive impact on communities and the environment.”
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