Coima’s new €500m fund to decarbonise Italian real estate

Coima yesterday announced the launch of the Coima Opportunity Fund III, which will focus on decarbonising real estate across major Italian cities and has a target of raising €500 million by 2024.

The fund raised €200 million at first close after securing backing from an Asian sovereign wealth fund, understood to be Singapore’s GIC, which joined as anchor investor.

“The first close of COF III underlines Italy’s continued importance as a strategic market for national and international capital focused on sustainable urban regeneration,” said Manfredi Catella, founder & CEO, Coima SGR. “Cities have a hugely important role in the transition to a low carbon future and we at Coima are ready to play our part in accelerating this journey by delivering sustainable low carbon real estate, with a focus on building re-use, that has a positive social impact.”

The fund is focused on building a portfolio of next-generation carbon neutral real estate projects in the office and residential sector, particularly brown-to-green urban redevelopment and retrofit projects in central areas of Milan and Rome where corporate demand for high quality sustainable real estate is strong.

The portfolio will be fully aligned with European taxonomy on decarbonisation, Coima said, and all buildings will be LEED certified.

The fund will last a decade and will primarily target international institutional investors, with a goal of raising €500 million in 2024. Through financial leveraging the Fund will have an overall investment capacity of around double this amount, and a pipeline of projects worth more than €1 billion has already been identified. The target return rate (levered IRR) is 14%.

COF III is the third opportunistic fund launched by Coima. It follows COF I, which is already disinvested with returns exceeding the initial target (13% levered IRR versus the expected 8%) and COF II, which raised over €500 million from leading international investors. COF II is now fully invested one year ahead of schedule and its returns are currently in line with the levered IRR goal of 12%.

COF III forms part of Coima’s wider strategic commitment to ESG-led real estate. The group is seeking to raise over €3 billion in investment over 2024-2026 through sustainable investment vehicles classified under Art. 8 or Art. 9 of the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

As well as COF III, these include Coima’s ESG City Impact Fund, which so far has raised over €800 million from leading Italian institutional investors and is set to reach €1 billion in investment by the year end. This fund has just approved an increase in its target size from to €1 billion to €2 billion.

Coima has also planned the launch of a series of SFDR-aligned programmatic funds focused on decarbonisation in specific sectors, including residential and tourism, which together are targeting €2 billion in investment through to 2026.