A new green property fund has been launched by investment bank Climate Change Capital.
This is the first time the ‘green’ bank, which has $1.5bn (£750m) of assets under management, has moved into property. Most of its investments are in renewable energy.
Kenmore, Parma Capital Partners and Aberdeen Property Investors are also seeking to raise money for green property funds.
The Climate Change Capital fund is led by Tim Mockett, a former property director at Stow Securities, and Esme Lowe, most recently a director at property investment firm Capital Trust.
The fund will concentrate on the UK market and will develop, buy and refurbish property to high environmental standards. Mockett said a two-tier property market would emerge in the medium term, consisting of properties that meet ever-tighter environmental legislation and those that do not.
‘The developments we create and the buildings we refurbish will be over the line in terms of green compliance and low energy use and they will outperform those that are not compliant,’ said Mockett.
Mockett and Lowe are seeking equity from investors but declined to give a target figure. Returns will vary with the investments. ‘Our investors are seeking standard property returns in the short term but in the medium term, we feel those earning will be enhanced,’ said Mockett.