Feldberg Capital completes second transaction for £500 million Central London brown-to-green impact fund with purchase of Covent Garden asset

London, 2nd April 2024 – Feldberg Capital (‘Feldberg’) has acquired 21-25 Bedford Street, London WC2, for approximately £75.0 million, for its ReForm Fund (the ‘Fund’).

ReForm is a pioneering brown-to-green workplace fund, investing in energy inefficient ‘brown’ offices and using Feldberg’s innovative ESG capability to retrofit and reposition these assets into modern green workplaces. The Fund targets assets in Central London’s growth locations underpinned by excellent connectivity and amenity, such as Covent Garden, Soho, Fitzrovia and Bloomsbury.

21-25 Bedford Street is a highly prominent building less than 100 metres from Covent Garden Piazza with world-class restaurants, bars, retail and theatres. The building is close to both Covent Garden and Leicester Square underground stations, while Tottenham Court Road station (on the new Elizabeth Line) is only 750 metres away.

In line with the ReForm Fund strategy, ESG upgrade measures will include the removal of gas boilers, installation or air-source and water-source heat pumps, and installation of on-site solar panels. Furthermore, Feldberg’s focus on social sustainability will see the creation of an asset-specific charity partnership chosen based on the results of a needs assessment of the local Covent Garden area.

These examples highlight ReForm’s status as a pioneering impact fund focussing on both decarbonisation as well as delivering on social objectives. The investment strategy includes ambitious ESG targets and innovative features that will ensure ReForm has a meaningful positive impact for all stakeholders. ReForm is one of the first UK funds to link a proportion of the manager’s performance fees to pre-determined ESG targets, creating alignment between investors’ ESG ambitions and financial returns.

Feldberg launched ReForm impact fund in October 2023 in response to growing dislocation between healthy, tech-enabled, green workplace assets where tenant demand is exceptionally strong, and older, less energy-efficient offices that are at risk of asset stranding. The transition of these ‘brown’ office assets into green workplaces breathes new life into the buildings and communities they serve. Embarking on this strategy at a time in the market where there are macro-economic and structural
challenges has created attractive buying opportunities for the Fund.

This follows the first Fund acquisition in December 2023 of 8 Bloomsbury Street, a 33,448 sq ft building located close to Tottenham Court Road station, which is currently undergoing a retrofit to provide bespoke, fully-fitted, green workplace. ReForm received significant backing from a cornerstone UK institutional investor in October 2023, followed by a second close in December 2023. The Fund has a fundraising target of £300 million, which will provide firepower of around £500 million including leverage.

Robert Allen-Mersh, Director at Feldberg said: “This acquisition continues to support our thesis that we are seeing a once-in-a-cycle opportunity to invest in Central London’s best commercial real estate assets at very attractive values. 21-25 Bedford Street is a very high-quality mixed-use building in the heart of Covent Garden with exciting asset management upside.”

Will Amies, Head of Business Development at Feldberg said: “21-25 Bedford Street marks ReForm’s second transaction following the impact fund’s acquisition of 8 Bloomsbury Street late last year. We achieved first close on ReForm in October 2023 and subsequently quickly reached second close in December 2023. Our ability to fundraise in the current climate is testament to the belief investors have in our ability to deploy capital quickly into good buildings at very attractive pricing.”