Impax Asset Management, the AIM-quoted investment manager focused on environmental markets and owner of Manchester's 40 Spring Gardens, is targeting the North West for investment next year.
The fund manager said it is looking for opportunities to future-proof outdated buildings by ensuring they reach higher environmental standards and are made more appealing to occupiers.
Tim Mockett, co-manager of the Impax Climate Property Fund, which has £2.8bn under management, said: "Under the Energy Act 2011, from 2018 landlords will not be able to let properties with an EPC rating of F or G to new tenants. This legislation will mean that almost 20% of office buildings will become effectively unlettable. We plan to identify further opportunities in Manchester where we can renovate to the highest environmental standards and optimise space for occupiers. Ultimately this regeneration of assets benefits occupiers, investors and the wider region. Our proven approach has boosted total returns, or green alpha, for investors by 10 – 15% above other commercial property assets in the region."
Impax already owns one 40 Spring Gardens where it has says it succeeded in reducing carbon emissions by 25% over the last two years. 40 Spring Gardens has an EPC rating of 'C'. Impax plans to bring a further 36,000 sq ft to the market in this building in January 2015, offering a total of 50,000 sq ft of available office space.
Langtree founder Bill Ainscough sold 40 Spring Gardens in 2010 to Climate Change Capital's property fund, now part of Impax, for £45m, one year after buying it from Langtree for less than £24m.
Impax did not put a figure on its investment pot for future acquisitions.
Jamie Bottomley, senior surveyor in office agency at CBRE and joint letting agent on 40 Spring Gardens, said: "Impax's plans for further investment in Manchester are exciting. Importantly, their environment benchmarking demonstrates their ability to deliver and commitment to delivering green alpha. The improved environmental performance of 40 Spring Gardens has been clearly quantified. With the constrained supply of top quality office space in Manchester, we expect environmental performance to play an increasing factor in occupiers' decision making, particularly for large Grade A occupiers."
Impax produced revenue of £20.4m in the year to the end of September, generating a pre-tax profit of £3.5m.