Realcast: Blackstone readies resources, easing carbon burden, taxonomy clarity needed

In the headlines this week:

In another emerging US trend that may also occur in Europe JP Morgan has called for all managing directors to return to the office full time, even on Fridays.

And in a further sign that there is plenty of capital targeting real estate Blackstone has announced the final close of its latest global real estate fund in what it says is the largest real estate or private equity drawdown fund ever raised. The fund, Blackstone Real Estate Partners Ten, has $30.4 billion of capital commitments.

Blackstone said that in anticipation of changing macrotrends it shifted its portfolio away from asset types facing headwinds, including traditional offices and malls and that about 80% of its portfolio is in logistics, housing for rent, hospitality, lab office and data centre assets.

Meanwhile in Paris, luxury retail brands owner Kering Group is paying more than €600 million to forward fund an 8,000 sq m mixed-use development close to Place Vendôme in the city’s 1st arrondissement, where Gucci will occupy 80% of the space.

Demand for industrial and logistics real estate space in CEE markets will outperform Western and Southern Europe, according to new research from logistics and industrial developer/investor CTP which has highlighted five factors that are driving growth in the sector. CTP plans to double its own size by 2030 to respond to the expected increase in demand.

Elsewhere Axa IM Alts agreed the sale of one of Europe’s largest data centre platforms, Data 4, to Brookfield Infrastructure.

Decarbonisation is in the news and LaSalle Investment Management’s debt investment division has expanded its senior secure debt strategies to include a dedicated sustainable lending focus in response to the increased drive towards net zero carbon. In the last year LIM has provided over €350 million in green loans.

London-based private equity company Chayton Capital has signed a memorandum of understanding with the government of Montenegro and the country’s National Power Company for a €700 million ESG compliant infrastructure development project to reduce the country’s carbon footprint and modernise its energy infrastructure in what is the largest ever foreign investment into the country.

Spanish company Azora has acquired a strategic minority state in Abatable, a London-based carbon procurement and market intelligence technology company which helps businesses connect with carbon project developers to offset their carbon emissions. The deal enables Abatable to acquire  carbon credits procurement platform Ecosphere plus. The combination of the three companies will create the largest tech-enabled carbon procurement platform in the world.

In the UK, Fiera Real Estate has formed a strategic partnership with affordable housing specialist SimplyPhi to provide an initial £30 million to acquire a portfolio of affordable homes across the UK to be let on 20-year plus index linked leases to local authorities. The housing situation is critical in the UK where there are 1.2 million households waiting for affordable housing and 100,000 in temporary accommodation.

Research from Savills looks at the impact of the energy crisis on different sectors.  While office and logistics have been the most shielded from the energy crisis because energy costs account for a small share of their business expenses – 2-4% of total costs in offices compared to staff costs which account for over 50%, and transport and labour account for over 75% for logistics. Energy cost increases have less impact on these sectors but much more on the likes of retail, life sciences and data centres which should therefore rely much more on green sources of energy.

Meanwhile, as PwC’s Sebastian Kreutel told us in a recent interview, greater clarification is still needed to help the real estate sector make EU taxonomy a reality.

Click on the video to see the full discussion or listen to the podcast below.