First local authority pension funds invest in low carbon commercial real estate development partnership

As pension funds increasingly recognise the importance of incorporating climate change factors into their investment decision processes, the investment vehicle of the Low Carbon Workplace Partnership (LCW), a collaboration between Threadneedle Investments, Stanhope and the Carbon Trust, has secured investment from two local authority pension schemes; Flintshire County Council, on behalf of the Clwyd Pension Fund, and The Environment Agency Active Pension Fund.

UK pension funds are increasingly embedding social, environmental and economic considerations of climate change in to their investment philosophy, with the total UK managed assets in sustainability themed investments now estimated at £7.5bn. The aim of the LCW Partnership is to deliver a solution to meet this growing demand, while also providing potential for outperformance.

Since the launch of the LCW Partnership in 2010 four projects have been acquired, refurbished and completed to Carbon Trust standards generating high levels of occupier interest leading to 85% of the space being pre-let even prior to the completion of work.  In Twickenham, Premier House attracted a pre-let on 70% of the space from Thomas Valley Housing prior to completion and is now fully let.  In Guildford, the Billings generated an immediate pre-let from Investec and is now 85% let. In Hammersmith, Winton Capital committed to the whole 60,000 square foot project prior to works commencing on site. The most recent commercial project in Wimbledon is also subject to pre letting discussions. There are two further projects in pre-development phase in Richmond and Clerkenwell.

The LCW Partnership was launched in response to the growing demand from occupiers for workplaces that deliver efficiency in use, both in terms of reduced energy use, lower carbon emissions and reduced occupancy costs. It refurbishes properties to best practice low carbon standards, set by the Carbon Trust, and uniquely offers occupiers ongoing advice and support to ensure the building’s energy efficiency specification is achieved in-use.  It targets outperformance for investors through generating strong capital returns from its refurbishment activities, as well as delivering a secure, long term income stream satisfying the considerable demand from high quality occupiers for low carbon properties. 


Find out more about Low Carbon Workplace