ESG focus grows with adoption of Article 8 of the Sustainable Finance Disclosure Rules
Europa Capital, the pan-European real estate investment manager, saw transaction activity return to pre-pandemic levels in 2021 with a total of €1.4 billion transacted in the year (2020: c. €500 million). Acquisitions were secured across the risk spectrum on behalf of its value add and core funds.
The living and logistics sectors accounted for almost 80% of total transactions, reflecting Europa Capital’s conviction in the continuation of urbanisation trends across Europe fuelling the need for increased amounts of living and logistics space.
A contrarian view on the future of the office following the dislocation of the pandemic, saw the remainder of the investment deployed into well located office assets on behalf of its latest value add fund. Europa Capital believes there will remain long term demand for the right stock in the office market.
Leasing activity was also strong in 2021, in particular in the office sector where the Asset Management team agreed deals on a total 26,000 sq metres of space, reflecting continued occupier demand in this sector.
The Europa Diversified Income Fund (“EDIF”), Europa Capital’s pan-European core fund, delivered a strong 8% net total return for its investor clients in 2021. Since its inception in late 2018, EDIF has consistently delivered top decile total return outperformance to market indices, which has been driven by capitalising on its inhouse expertise in living and logistics, as well as its proactive approach to active asset management.
Europa Capital continued to place sustainability at the centre of its agenda in 2021. As well as signing up to Article 8 of the Sustainable Finance Disclosure Rules, all acquisitions adhered to the UN’s Sustainable Development Goals with the goal of transitioning to Net Zero Carbon and aligned to forthcoming Taxonomy Regulation.
EDIF’s consistent improvement, since being first rated by GRESB in 2019, was recognised in its award of a four star rating in 2021. Europa Capital’s value-add funds also saw improved scores on prior years with its latest fund securing a €210 million sustainability-linked loan which is conditional on the achievement of a number of ESG targets.
Jason Oram, Executive Committee member of Europa Capital, commented: “Our successes in 2021 have demonstrated our ability to deliver real estate investment strategies for our clients across a diverse mix of investment products, despite the challenges of the pandemic. We are also pleased to have welcomed new clients into both our value-add and core funds during the year, whilst continuing to strengthen relationships with our existing investors.”
Rob Sim, Managing Partner at Europa Capital, commented: “Prioritising sustainability in our investments is fundamental to both our business and our clients, and the 20% increase in EDIF’s GRESB score is a fantastic achievement.
“We have also made a number of exciting appointments over the year in the areas of asset management and investment, as we continue to grow the team. We also continue to actively support the social element of ESG through a number of charities, including the provision of scholarships and bursaries to students at Sheffield Hallam University.
“At Europa Capital we are passionate about the acceleration of diversity into the real estate industry, and we are pleased to be able to support students from lower socio-economic backgrounds complete their degrees. The feedback from students we have had, particularly over these last two difficult years, has been humbling, but also exciting, as we see the level of talent that will eventually join the market.”
