London, 23rd January 2024 – Feldberg Capital GmbH (‘Feldberg’), today announce that they have achieved second close on impact fund, ReForm (the ‘Fund’).
A further £50 million has been committed to the Fund at second close, bringing the total fundraise to £100 million since it launched in October 2023.
The ReForm fund is a pioneering brown-to-green workplace fund investing in energy inefficient ‘brown’ offices and using Feldberg’s market leading ESG framework to retrofit and reposition these assets into modern green workplaces.
The Fund stands out as a pioneering impact investment fund, focussing on both decarbonisation as well as delivering on social objectives. Its investment strategy includes ambitious ESG targets and innovative features in place that will ensure ReForm has a meaningful positive impact for all stakeholders, for example:
- ReForm is 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.
- Individual asset-specific Science Based Targets will be set for reducing carbon emissions ensuring they will be as environmentally friendly as possible in operation.
- Each ReForm asset will have 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 is well placed to deliver this impact strategy as showcased through their London-focused investment ventures including Akoya, a £550 million London neighbourhood workplace strategy in partnership with a global sovereign wealth fund focusing on sustainability, occupier wellbeing and local community.
The ReForm fund focuses on workplace assets in amenity-rich central London zone 1 locations with excellent connectivity and strong growth characteristics, such as Soho, Fitzrovia and Marylebone. These locations are set to continue to exhibit robust occupier demand, driven by accessibility including the Elizabeth line, and London’s continued role as a leading European business and financial hub.
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. This, in addition to the current challenging macro-economic climate, has created an attractive buying opportunity. Feldberg was able to capitalise on this with the purchase of 8 Bloomsbury Street, the first asset for the Fund which completed at the end of last year and just two months after the Fund was launched. ReForm continues to seek similar deals and expects more transactions to be completed throughout 2024.
Despite the recent headwinds the office sector and wider fundraising market has faced, ReForm’s second close demonstrates there is strong appetite from investors for high-quality ESG-focused London workplace investments in the central, amenity-rich locations. The Fund is targeting a total equity raise of £300 million, which will provide firepower of £500 million including leverage.
Will Amies, Head of Business Development at Feldberg, commented: “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, added: “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.”