Perennial Real Estate Investments is on the cusp of rolling out what is believed to be the world’s first listed global property securities fund that formally incorporates environmental, social and governance factors into the investment decision process.

The Aussie fund manager has partnered with investment advisory firm Innovest Strategic Value Advisors to launch the Perennial Sustainable Global Property Securities Fund. I&T understands the product disclosure statement is being lodged with ASIC within the next two weeks and the fund will be seeded shortly thereafter. Bill Hartnett, managing director of Innovest, said the benefits from green buildings typically included lower operating costs and high demand from corporates for tenancy. In some cases, the annual costs associated with energy, water and waste can account for 30 per cent of the operating cost of an office building, he added. “It’s not a morals or an ethical story, this is a dollars and cents story – what’s good for the environment is good financially as well,” he said. “If you’re investing in listed property securities that have a lower running yield and greater demand from tenants it should be a positive investment story.” Hartnett said property was an environmentally intensive sector with approximately 40 per cent of global CO2 emissions, 40 per cent of energy, 20 per cent of water and 40 per cent of waste consumed in properties and or the built environment. “You really want to be hedging against rising energy, water and waste costs, so going green provides the hedge for this and allows you to reduce what is a significant operating cost for an office building,” he said. The investment approach adopted by the new fund will shift the portfolio towards listed real estate companies with superior ESG risk ratings and away from ESG risk laggards. Perennial declined to comment.

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