Rest joins new climate impact fund as cornerstone investor

9 April 2024
| By Rhea Nath |
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Rest has announced it has signed on as a cornerstone investor in Fidelity International’s Fidelity Real Estate Logistics Climate Impact Fund (the LOGICs fund).

The LOGICs fund seeks to add value by responding to a growing desire for quality, energy-efficient assets in key markets including France, Germany, Netherlands, and the United Kingdom.

It will focus on acquiring logistics properties across core Western European markets and redeveloping them into high-quality assets that can be operated at net-zero carbon and will also be able to generate renewable energy through the installation of solar panels.

According to Rest, the LOGICs fund’s focus on climate impact offers a “fantastic opportunity” to benefit the fund’s 2 million members, including more than half who are younger than 30 and will retire into a post-2050 net-zero world.

It aligns with a “robust and transparent” climate impact framework, with a clear goal for each asset to achieve net zero carbon emissions as a Sustainable Finance Disclosures Regulation (SFDR) and follows numerous impact investments by Rest in recent months. These include unlisted infrastructure-focused Palisade Impact Fund, agriculture-centred Cibus II Fund, and an international listed equities mandate with global investment manager Ninety One.

“With logistics properties trading at attractive rates and demand for energy-efficient facilities growing, we believe the LOGICs fund will drive rental yields and property values that should translate into strong financial returns while helping to speed up the path to a carbon-neutral economy,” said Andrew Lill, Rest’s chief investment officer.

Fidelity International’s global chief investment officer Andrew McCaffery observed that the firm’s real estate climate impact strategies held more than $900 million of deployable capital towards such opportunities.

“The LOGICs fund launch is a great example of partnering with our clients to jointly develop solutions to meet their evolving investment needs,” McCaffery said.

“We are excited by the opportunity to take advantage of current market conditions and deliver strong returns as well as tangible carbon reduction within an accelerated time frame.”

The investment also brings the $80 billion fund Rest closer to its target of achieving a 1 per cent allocation to impact investments across its total portfolio by 2026, with the fund identifying opportunities in decarbonisation and the demand for high-quality logistics facilities.

“Around 40 per cent of total global carbon emissions come from real estate. With 85 per cent of Europe’s buildings over 20 years old, improving them provides a valuable solution to growing demand from businesses looking to move quickly towards net zero operations,” Lill remarked. 

“Business demand for high-quality logistics facilities is expected to grow as we continue to see the property sector respond to global decarbonisation priorities and other worldwide economic and geopolitical factors.”

He also viewed the reshoring of supply chains and the continued expansion of e-commerce retail as other drivers of demand.

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