Summary
No sustainable investment objective
Environmental or social characteristics of the finance product
Investment strategy
Share of investments
Monitoring of environmental or social characteristics
Methods
Data sources and data processing
Limitations of the methodology and data
Due diligence
Shareholder engagement policy
Designated reference benchmark
Summary
The aim is for the Fund to act as a long-term real estate investment vehicle for its investors, and it may execute transactions throughout its term.
The Fund promotes environmental and social characteristics by favouring flexible, energy-efficient properties that are suitable for more than one purpose. The Fund favours low-carbon options and invests in renewable energy production. The Fund places emphasis on the longevity and convertibility of properties in selecting investments as well as in construction and modernisation. The Fund seeks to promote sustainable mobility by building electric vehicle charging stations, secure bicycle parking, and additional social facilities for users.
This financial product promotes environmental or social characteristics, but sustainable investment is not its objective. Insofar as sustainable investments are made in the Fund, those investments in line with the EU Taxonomy which have set climate change mitigation as their environmental goals are considered sustainable investments. Climate change mitigation is promoted by investing in the options that meet the requirements of the EU Taxonomy.
Insofar as the Fund makes sustainable investments with climate change mitigation as the environmental goal, it is assessed in line with the EU Taxonomy that the investment does not cause significant harm to other goals following the EU Taxonomy. As part of the assessment, climate risk analysis is carried out for sustainable investments.
Sustainability indicators monitored include the production of renewable energy, energy efficiency, facilities for electric vehicles and the number of certified properties.
No sustainable investment objective
The aim is for the Fund to act as a long-term real estate investment vehicle for its investors, and it may execute transactions throughout its term.
The Fund promotes environmental and social characteristics by favouring flexible, energy-efficient properties that are suitable for more than one purpose. The Fund favours low-carbon options and invests in renewable energy production. The Fund places emphasis on the longevity and convertibility of properties in selecting investments as well as in construction and modernisation. The Fund seeks to promote sustainable mobility by building electric vehicle charging stations, secure bicycle parking, and additional social facilities for users.
This financial product promotes environmental or social characteristics, but sustainable investment is not its objective. Insofar as sustainable investments are made in the Fund, those investments in line with the EU Taxonomy which have set climate change mitigation as their environmental goals are considered sustainable investments. Climate change mitigation is promoted by investing in the options that meet the requirements of the EU Taxonomy.
Insofar as the Fund makes sustainable investments with climate change mitigation as the environmental goal, it is assessed in line with the EU Taxonomy that the investment does not cause significant harm to other goals following the EU Taxonomy. As part of the assessment, a climate risk analysis is carried out for sustainable investments.
Sustainability indicators monitored include the production of renewable energy, energy efficiency, facilities for electric vehicles and the number of certified properties.
Environmental or social characteristics of the finance product
The Fund promotes environmental and social characteristics by favouring flexible, energy-efficient properties that are suitable for more than one purpose. The Fund favours low-carbon options and invests in renewable energy production. The Fund places emphasis on the longevity and convertibility of properties in selecting investments as well as in construction and modernisation. The Fund seeks to promote sustainable mobility by building electric vehicle charging stations, secure bicycle parking, and additional social facilities for users.
Investment strategy
The aim is for the Fund to act as a long-term real estate investment vehicle for its investors, and it may execute transactions throughout its term. The objective of the Fund is to generate an annual return of at least 9% (IRR) on investments made by the investors. The Fund’s diversified real estate portfolio is built from investments selected on a case-by-case basis, in other words using the Bottom-up method. The Fund may use debt financing for its investments. Investment decisions are made by the general partner in accordance with the Fund agreement.
Insofar as the Fund can invest in companies, a qualitative analysis is made for these based on which the implementation of good governance is assessed. When assessing a company’s governance, some of the areas considered include the appropriateness of the company’s administrative organisation, the company’s actions in relation to its personnel, and the company’s rewarding and taxation practices. In addition, the company’s operations should be transparent. To the extent that the Fund invests in properties in alignment with the EU Taxonomy, its aim is to promote climate change mitigation.
Share of investments
The Fund’s investments promote environmental and social characteristics. At least 20% of the investments promoting environmental and social characteristics align with EU taxonomy and are thus also sustainable investments.
Other characteristics related to the environment or society cover investments promoting environmental or social characteristics and that are not considered sustainable investments and not aligned with EU Taxonomy.
The Fund’s other assets cover other investments in the financing product that do not promote environmental or social characteristics, and that are not considered sustainable investments. Other assets may comprise short-term net assets such as cash investments and derivatives used for interest rate hedging. Sustainability factors cannot be considered separately for derivatives.
The Fund does not have a minimum share of sustainable investments not in line with the EU Taxonomy. Additionally, the Fund has no minimum share of sustainable investments with social targets.
Monitoring of environmental or social characteristics
Sustainability indicators monitored include the production of renewable energy, energy efficiency, facilities for electric vehicles and the number of certified properties.
In addition to ESG indicators, the Fund seeks to promote pedestrian and bicycle traffic by building secure bike parking spots with charging stations, and additional staff facilities for users.
All of the Fund’s properties carry out energy monitoring, which provides up-to-date usage data and comparison with similar properties. An energy audit has been carried out at all of the Fund’s properties to ensure that building technology is being used properly and working as planned. The audits are renewed according to need.
The acquisition of new properties emphasises geographical sustainability and analyses the accessibility and convertibility of the property. When assessing convertibility, the property’s suitability for different tenants and purposes are evaluated. Factors that are taken into consideration include capacity for loading bays, load carrying capacity of floors in warehouse and production areas, clearance height, and the possibility of expanding the property in the future.
The Fund keeps in regular contact with the tenants of owned properties. The functionality of services and properties is ensured with tenant meetings and satisfaction surveys. Based on feedback, the properties are developed to better respond to tenants’ needs, such as by adding new electric vehicle charging stations to meet demand.
Methods
The production of renewable energy in invested properties is tracked based on the number of properties. Energy efficiency is tracked annually by calculating the average energy class according to energy performance certificates, with a weighting based on building volume. This indicator does not consider properties for which no energy performance certificate will be drawn. Capacity for electric vehicles is tracked based on the number of properties with EV charging stations. Sustainability indicators are identified for each new investment and reported annually in summary reports.
Data sources and data processing
Data used to assess the materialisation of environmental or social characteristics is received from building permits and contract documents or from the contractor or seller of the property. In addition, data is obtained from official registers and other public sources. Data quality is ensured with a careful DD process. The ESG officer ensures in the investment decision proposal that ESG criteria are met. In addition, third-party service providers are used for monitoring and storing data related to the defined indicators. The assessment is made in the investment decision phase, when data on new developments is based on designs that precede the construction phase.
To the extent that the Fund may invest in other funds or companies, this data is collected in connection with the ESG DD of the investment to determine that the proposed investment takes sustainability risks sufficiently into consideration.
Limitations of the methodology and data
In construction projects, ESG assessment is made during the building permit phase, at which point details such as the building’s energy class are still subject to changes. Possible changes to the building’s construction method are always negotiated with the contractor, and the contractor may not unilaterally make changes to the building’s sustainability factors. The changes may not materially worsen the property.
In turn, ESG analysis of finished potential investments may contain inaccuracies because the seller does not always have access to comprehensive, up-to-date data on the property’s sustainability factors. The data is supplemented by DD audits by third-party experts and information obtained from public sources.
Due diligence
As part of the acquisition of new investments, an appropriate due diligence is carried out. The audit investigates, among other matters, predefined questions related to the investment’s sustainability. The investment decision is based on reports made in the DD audit phase and responses received from the seller or developer. The audit may also involve external technical specialists. Possible changes in construction projects are always discussed with the contractor. As part of the assessment during the investment decision phase, the investment is also screened for predefined exclusion criteria.
Shareholder engagement policy
The Fund’s portfolio manager, OP Real Estate Asset Management Ltd, does not draw up or publish its shareholder engagement principles. This is because the funds under its management do not invest in the shares of companies traded in a regulated market.
To the extent that the Fund may invest in other funds or companies, the Fund is an active shareholder by appointing a representative in the Fund’s or company’s bodies or by attending meetings of the relevant bodies, such as shareholder’s meetings, and by engaging in direct dialogue with the Fund or company.
Designated reference benchmark
No benchmark value has been set to achieve the environmental and social characteristics that the Fund promotes.
LEI ID 743700KYPJ1G53BGDN22