BNP Paribas REIM launches first European property climate fund compliant with 2015 Paris Agreement
BNP Paribas Real Estate Investment Management (BNP Paribas REIM) has successfully launched the first property fund that sets out to be compliant with the 2015 Paris Agreement, a landmark agreement that brought nations together to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low carbon future.
The “European Impact Property Fund” (EIPF) by BNP Paribas REIM has EUR160 million of equity capital commitments secured to date, including EUR100 million from a leading European Insurance company and another French institutional investor also backing the fund at its first close.
The real estate sector has a pivotal role to play in tackling the climate challenge with the sector being responsible for 39 per cent of all global Greenhouse Gas Emissions (GhG), according to the World Green Building Council. The climate issue is also high on the political agenda in particular a few days away from the 5th year anniversary of the Paris Agreement.
EIPF sets an ambitious target to be the first fund compliant with the 2015 Paris Agreement in line with the International Energy Agency (IEA) trajectory and to deliver a positive and measurable climate impact. The fund’s strategy targets a 40 per cent reduction of GhG emissions within 10 years across its whole European portfolio.
Significant impact will be achieved by targeting and reducing emission in existing stock. BNP Paribas REIM has therefore developed a tailored action plan that together with strong stakeholders’ engagement will help to gradually reduce energy consumption and lower the emissions for assets in the fund.
The fund will implement a “best-in-progress” approach by targeting existing properties in Europe across all user classes of real estate. The business has also put in place a detailed climate reporting system, to quantify the fund’s positive impact on assets and to measure the success of reducing GhG emissions and contribution to the low carbon transition.
Structured as a Core European Diversified Open-Ended Fund, EIPF expects to reach a gross asset value in excess of EUR1 billion over the next couple of years with a strong diversification by sector and geography. EIPF objective is to achieve recurring and stable income return with an annual distribution of approximately 4% net with a target LTV of 25%.
“BNP Paribas REIM is recognised as a trusted partner for Core European strategies. EIPF offers a very innovative real estate investment solution to investors seeking stable income return whilst looking to participate in the climate transition, which is becoming increasingly important in the allocations of institutional investors,” says Laurent Ternisien, Chief Client Officer.
“BNP Paribas REIM is already long-standing manager in the ESG field. The objective of EIPF is to go one step beyond established practices with a climate Impact Investing approach applied to European properties. BNP Paribas REIM is committed to being a frontrunner in ESG strategy” comments Nathalie Charles, Deputy CEO of BNP Paribas Real Estate and Global Head of Investment Management.
EIPF is a SICAV-SIF based in Luxembourg. This Core Diversified Open-Ended fund, managed by BNP Paribas REIM Luxembourg, offers diversification within Europe across all sectors to international institutional investors.