Fidelity International has purchased 99 Queen Victoria Street in London from WeWork’s property investment arm for an undisclosed price.
Fidelity bought the building as part of its new Real Estate Climate Impact Fund. It intends to fully refurbish 99 Queen Victoria Street to provide 88,000 sq ft of BREEAM Excellent, EPC A and NABERS five star-rated office space.
The refurbishment programme will focus on improving energy efficiency and will include the removal of gas equipment, installation of new air source heat pumps and a new building management system.
Fidelity’s climate impact fund is predominantly targeting commercial real estate assets in Western Europe that require sustainable retrofits, with the focus of refurbishments on delivering an accelerated net zero carbon pathway on each asset.
Uplifts in capital value are expected to be achieved through an increase in expected rental value and through investor demand for sustainable assets, with refurbished assets held for three to five years.
Neil Cable, head of European real estate investments at Fidelity International, said: “While investors can buy new assets built to higher environmental standards, the biggest scope for achieving impact lies in the buildings that exist today, most of which are expected to still be around by 2050. Refurbishing and retrofitting these buildings can both reduce the carbon footprint of our built environment and improve the wellbeing of those who use them.
“Turning brown to green also presents a significant investment opportunity as there is currently a chronic undersupply of net zero carbon space versus occupier demand, resulting in a green premium. This structural mismatch will erode over time but we believe the next five to seven years represent a rare opportunity to deliver disproportionate returns for carefully managed development risk. 99 Queen Victoria Street is one of a series of investments in the pipeline for our new Fidelity European Real Estate Climate Impact Fund.”
Lisa Moran from James Andrew International, which acted for Fidelity on the purchase, added: “It is exciting to have delivered the first building purchase for the new Fidelity European Real Estate Climate Impact Fund. The fund looks forward to achieving its objective of refurbishing and repositioning commercial real estate in western Europe to deliver sustainable office environments for the future. We are looking forward to a successful letting campaign and the delivery of a new sustainable development in 2025.”
Cushman & Wakefield acted for the vendor.
