Fidelity International Close First Round of LOGICs Fund

Fidelity International has announced the $217.35 million first close of the Fidelity Real Estate Logistics Impact Climate Solutions Fund (LOGICs) which will invest in logistics real estate across Western Europe.

Rest Super, one of Australia’s largest superannuation funds, acted as a cornerstone investor to the new fund with a commitment of $86.94 million, agreeing to invest an additional $130.41 million in any future closes.

This is the second real estate climate fund for Fidelity, which manages $776.2 billion in assets, having launched its first such vehicle at the end of last year.

With this second fund, the fund manager hopes to accelerate the race to net zero. “There is an urgent and appealing investment opportunity to help turn brown to green,” Fidelity International said.

In fact, 85% of all buildings in the European Union (EU) are over 20 years old and more than 40% of total carbon emissions being emitted come from the built environment, Fidelity said, citing the International Energy Agency (IEA).

Rare Opportunity

The new fund, classified as an SFDR Article 9 fund, plans to buy existing buildings, and turn them into “high quality assets that are capable of being operated at net-zero carbon.” It will also provide occupiers with new solar panels so they can generate their own green energy.

According to Fidelity’s research, brown logistics buildings are currently priced 20% to 30% cheaper than during their peak in 2022.

At the same time, the e-commerce sector continues to grow in Western Europe, while there aren’t enough quality logistics assets on the market. These two factors combined has created a rare opportunity to deliver outsized returns for modest risk over the next few years, Fidelity said.

Strong Returns

Andrew Lill, chief investment officer at Rest Super, said that with logistics properties trading at attractive rates and demand for energy efficient facilities growing, they believed that 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. 

Andrew McCaffery, co-chief investment officer at Fidelity International, said that with approximately $598 million of deployable capital within their real estate climate impact strategies, Fidelity is excited by the opportunity to take advantage of current market conditions and deliver strong returns as well as tangible carbon reduction within an accelerated timeframe.