Rest makes landmark investment in real estate climate impact fund

Rest, one of Australia’s largest profit-to-member superannuation funds, is further diversifying its growing industrial property and impact investment allocations, positioning the fund to leverage increasing demand for energy efficient facilities across Europe.

The super fund has today announced it has signed on as a cornerstone investor in Fidelity International’s Fidelity Real Estate Logistics Impact Climate Solutions (LOGICs) fund.

The LOGICs fund 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. Through the installation of solar panels, they will also be able to generate renewable energy.

Andrew Lill, Rest’s Chief Investment Officer, said LOGICs stands out because of the way it invests and this is a great opportunity to make the most of market conditions to benefit Rest members.

“Rest is pleased to join Fidelity to launch the LOGICs fund as its cornerstone investor. We believe its focus on climate impact offers a fantastic opportunity to benefit Rest’s approximately 2 million members, including the more than a million who are younger than 30 and will retire into a post-2050 net-zero world.

“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.”

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.

The investment also brings Rest closer to its target of achieving a one per cent allocation to impact investments across its total portfolio by 2026. Rest defines ‘impact investments’ as investments made in members’ best financial interests, to provide a financial return and a social and or environmental return.

As a Sustainable Finance Disclosures Regulation (SFDR) aligned fund, the LOGICs fund aligns to a robust and transparent climate impact framework, with a clear goal for each asset to achieve net zero carbon emissions.

Decarbonising operations is becoming a priority for businesses and this is set to continue, said Lill.

“Around 40 per cent of total global carbon emissions come from real estate1. With eighty-five per cent of Europe’s buildings over twenty years old2, improving them provides a valuable solution to growing demand from businesses looking to move quickly towards net zero operations.

“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.”

Other drivers of demand include the re-onshoring of supply chains and the continued expansion of e-commerce retail, said Lill.

Andrew McCaffery, Global Chief Investment Officer, at Fidelity International, said the LOGICs fund serves as a great example of collaboration.

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

“With approximately €550m [AUD 911.78m] of deployable capital within our real estate climate impact strategies, 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 timeframe,” said McCaffery.

Rest’s impact investments include unlisted infrastructure-focused Palisade Impact Fund, specialist private equity firm ARCHIMED, agriculture centered Cibus II Fund and an international listed equities mandate with global investment manager Ninety One.