Tishman Bets £830M On ‘Brown-To-Green’ Strategy

Tishman Speyer has raised the first slug of equity for a new fund that aims to make a profit making older buildings more sustainable. 

The U.S.-based company said that it had raised €600M (£500M) of equity for its Tishman Speyer European Real Estate Venture IX value-add and development fund. The fund has an equity target of €1B (£833M).

The fund will buy refurbishment and development schemes across the UK and Europe. A big plank of the fund’s strategy will be to refurbish existing buildings, reducing their carbon emissions before selling to investors that want highly sustainable buildings. It called this a "brown-to-green" strategy. 

“As a strategic priority, we are integrating ESG into every stage of the real estate life cycle, along with a set of commitments including a goal of net zero carbon emissions by 2050 or sooner across our global portfolio, and ensuring that all future acquisitions will have clear pathways to net zero” Tishman said in a statement. 

Since the onset of the coronavirus pandemic, TSEV VIII, the latest fund’s predecessor, has deployed a significant amount of capital and is now close to being fully allocated. Landmark acquisitions include Q207 at Friedrichstrasse 76-78 in Berlin’s central business district, Espace Lumière, Tour Cristal and Carré Saint-Germain in Paris, Angel Square in London and Puerto de Somport in Madrid. 

Tishman Speyer first invested in Europe in 1988. It now has €6.6B in assets under management invested in European markets in core and value-added private equity real estate funds and joint ventures. 

Angel Square is a 126K SF vacant building bought by Tishman for £87M in July 2021 from Derwent in Islington, north London. It plans to refurbish the building and then re-let it. 

Earlier this month it made its maiden acquisition in the UK life sciences sector, buying a 1.7-acre development site on Oxford Business Park.