French trade credit insurer Coface has invested in the Catella European Residential III Fund, the residential investment vehicle focusing on affordable housing and CO2 reduction.
CER III, a Luxembourg-domiciled SICAV fund, secured about €500 million in new equity commitments from Coface and a range of European institutional investors, mainly pension funds in 2022.
This commitment brings the total capital raised by the fund close to €1.25 billion since inception in 2019.
CER III is managed by Berlin-based Catella Residential Investment Management (CRIM).
Michael Fink, Managing Director, CRIM, said: “CER III has achieved remarkably strong and rapid growth since its launch in 2019. Catella focuses relentlessly on the highest possible sustainability targets for the decarbonisation transition and which encompass societal fairness through affordable rents.”
Sabrina Communie, Group Investment, ALM & Cash Director, Coface, added: “This investment fully supports Coface’s commitment to reduce its CO2 footprint.”
CER III integrates a significant reduction of greenhouse gas emissions from its properties and sustainable societal objectives in its investment mandate. The Fund has a geographically diversified portfolio of around 30 residential properties in seven countries across Europe. Alignment of interests between Catella and institutional investors in CER III is achieved through incorporating a penalty clause into the management agreement whereby CRIM will donate part of its recurring management fee to a relevant ‘impact-related’ United Nations Fund should the manager fail to meet the financial or societal targets set for the fund.
Abdallah Ould Brahim, CBRE France, Head of Capital Advisors, concluded: “The CER III Fund is targeting modern, affordable residential properties, including new developments, which provide stable cash flow and offer long-term value growth. CBRE Capital Advisors are mandated to advise on fundraising from international investors, and we’re happy to welcome Coface as the third reputable French investor in the Fund in addition to the two other existing French institutional investors. I see this Catella vehicle as one of the most compelling offerings in the pan-European residential investment market, not least because of its pioneering ESG profile.”
CER III’s mandate also allows the Fund to allocate up to 10% of its total assets under management to the ‘Elithis Impact Fund’, the world’s first ‘energy-positive’ residential impact vehicle, which invests in joint venture developments, currently in France, between Catella and French sustainable engineering group Elithis. The Elithis residential towers produce more renewable energy from solar power than the buildings and the tenants consume, reducing household energy bills and boosting disposable income.