Catella Real Estate and Bank Sarasin are jointly launching 'Sarasin Sustainable Properties European Cities' the first real estate fund for institutional investors that will invest solely in sustainable buildings in high-growth European cities. The fund offering is directed primarily at Swiss pension funds.
Many Swiss pension institutions already hold real estate in their portfolios. However, investment opportunities are becoming increasingly limited. Institutional investors therefore find international real estate markets an attractive alternative that offers further diversification. As real assets, properties also offer good protection against inflation.
The newly launched real estate fund will initially focus on Germany, France and the Nordic states. The fund's management will invest primarily in office and commercial properties. Up to 25% of the fund may be invested in residential buildings. Initially, the fund will buy only existing buildings. Later, development projects will be added. The fund aims to achieve a return of 5.0 to 5.5%.
Decisive: 3L and sustainability criteria
Besides the 3L principle location, location, location a number of other factors determine the value of properties. Against a backdrop of rising energy prices and stricter energy consumption regulations, a building's energy efficiency is a key factor in its capital appreciation.
In addition, the current financial crisis shows how important a careful review of the macroeconomic and political environment is. The cities in which the new fund will invest will be selected not only on the property market cycle, but also on their long-term socio-economic attractiveness.
The fund offering is directed primarily at Swiss pension funds via a German special Fund vehicle.