Clean Energy Finance Corp., MaxCap announce new investment mandate focused on sustainable-building upgrades
The Clean Energy Finance Corp. (CEFC) will leverage the power of private sector capital to finance sustainable-building upgrades, committing up to A$75 million ($48 million) via a new investment mandate. The mandate will target commercial offices, hotels and retail assets to decarbonize a substantial part of the property sector.
The CEFC investment will be managed by Australian commercial real estate investment manager MaxCap Group. Under the mandate, MaxCap will originate, execute and manage a portfolio of real estate loans, aiming to attract further institutional capital to invest in the sustainable refurbishment of commercial buildings.
The mandate will provide senior-debt finance for building owners seeking to improve sustainability performance of low-rated commercial office, retail and hospitality assets through repositioning and upgrade works that reduce operational emissions by at least 30 percent.
The first investment from the mandate paves the way for a greener Adelaide CBD, with a A$35 million ($23 million) commitment to refurbish a 26-story office tower. For this initial loan, MaxCap is coinvesting that amount via the MaxCap Investment Trust (MIT).
“It is essential that we make our commercial properties fit for a net-zero emissions future in the race to decarbonize,” said Michael Di Russo, head of property at CEFC. “Commercial buildings in urban centers, suburbs and regional towns across Australia account for around half of the nation’s building stock, and many have never undergone energy-efficiency upgrades.”
Renovating existing building stock has been recognized as a key priority for achieving decarbonization targets, with the International Energy Agency noting that retrofitting 20 percent of existing building stock by 2030 to net-zero levels will require an annual deep renovation rate of more than 2 percent from now to 2030 and beyond.
The CEFC has made more than A$2.5 billion ($1.6 billion) in lifetime commitments to improve energy efficiency and lift sustainability in Australia’s property through its investments across the industrial, commercial and residential sectors.
