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Commercial property energy efficiency fund raises £100m

Energy efficiency news – by GreenWise staff
30th January 2012
An investment fund, which supports the green refurbishment of UK commercial properties, has raised £100 million.
The Threadneedle Low Carbon Workplace Trust (LCW) launched 18 months ago and has reached the £100 million mark following an undisclosed equity investment from the Townsend Group, a provider of global property investment solutions.

LCW is a partnership between property investment manager Threadneedle Investments, commercial property developer Stanhope, and not-for-profit low carbon company the Carbon Trust. It already has four properties on its books with an end value forecasted at £54 million, and is in the final stages of securing two additional properties.

"We have reached critical mass with LCW. Since its launch 18 months ago, LCW has rapidly completed the acquisition and refitting of four buildings and secured high quality tenants. Townsend’s investment further validates the strength of the investment case for this fund," Don Jordison, managing director of Threadneedle Property said. 

Ongoing energy efficiency advice
LCW is unique in that as well as refurbishing commercial properties to best practice green standards, it offers occupiers ongoing advice and support to ensure the building’s energy efficiency specification is achieved in-use. 

The four existing projects in its portfolio are Premier House, Twickenham; Grove House, Hammersmith; Mansel Court, Wimbledon and The Billings, Guildford. 

Return on investment
LCW, which is committed to spend £42.5 million of capital expenditure on its first four properties, forecasts a return on equity across all of them in excess of 20 per cent against a fund target of 15 per cent. 

The Billings in Guilford will be the first to complete and is due to open in February. It is already part-occupied by Investec Wealth and Investment.

Tom Delay, chief executive of the Carbon Trust, described the Townsend investment as "a major shot in the arm for the sector. 
"With this new investment and with LCW’s first building scheduled to open in a matter of weeks we believe the market for low carbon commercial properties is now well and truly open."

Ingenious fund
Another UK investment fund targeting the energy efficiency property market is Ingenious’ Energy Efficiency EIS Fund. Targeting owner occupied commercial properties with reasonably high energy consumption, such as hotels, shopping malls, schools and hospitals, the fund is looking to raise £10 million by March 3 2012. Minimum investments must be £10,000.

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Commercial property energy efficiency fund raises £100m
Low Carbon Workplace project The Billings in Guilford is due to open in February
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