Sustainability-related Disclosures (SFDR Article 8)
Summary
This financial product (the “Fund”) is classified as an Article 8 product under Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“SFDR”).
The Fund promotes environmental and social (“E/S”) characteristics through the way it selects, manages, and operates its real-estate investments but does not have a sustainable investment objective as defined under Article 9 SFDR.
The Fund integrates environmental, social and governance (“ESG”) factors throughout its investment process, focusing in particular on:
- Reducing carbon emissions and improving energy efficiency across its portfolio; and
- Enhancing the sustainability credentials of its assets through recognised green-building certifications such as BREEAM.
These characteristics are embedded through the Fund’s investment strategy, asset-management approach and ongoing tenant engagement. The Fund does not commit to any minimum proportion of sustainable or EU-Taxonomy-aligned investments.
No sustainable investment objective
The Fund does not have a sustainable investment objective within the meaning of Article 9 SFDR. Its primary objective is to generate attractive risk-adjusted returns from European logistics real-estate assets while promoting environmental and social characteristics in accordance with Article 8 SFDR.
Although some investments may meet the SFDR definition of a “sustainable investment” (Article 2(17)), this is not the Fund’s purpose and no minimum share of the portfolio is committed to such investments. The Fund’s focus is on driving measurable ESG improvements at the asset level – for example, energy-efficiency upgrades, renewable-energy installation and improved tenant well-being – rather than targeting a defined percentage of sustainable or taxonomy-aligned holdings.
Environmental or social characteristics of the product
The Fund promotes environmental and social characteristics that reflect its two key priorities: reducing carbon emissions and achieving recognised green-building certifications.
Real estate is a significant contributor to global carbon emissions, and improving the energy efficiency and resilience of the portfolio is therefore central to the Fund’s approach. Environmental characteristics promoted include reducing greenhouse-gas emissions and energy intensity, installing renewable-energy systems, and achieving or improving recognised sustainability certifications such as BREEAM. The Fund also seeks to enhance biodiversity and climate adaptation across its sites.
Social characteristics focus on promoting safe, healthy and inclusive workplaces for occupiers, and on improving the accessibility and usability of assets through thoughtful location, design and management – for example by considering features that support active travel, accessibility and well-being. The Fund also fosters positive relationships with tenants through engagement, data sharing and joint ESG initiatives that encourage sustainable and responsible operations.
These characteristics are promoted through Boreal IM’s ESG Policy and Environmental Management System (“EMS”), which embed ESG considerations across investment decisions, asset management and reporting.
Investment strategy
The Fund will invest in well-located industrial real estate in six major European markets, with an emphasis on small-to-mid-bay industrial assets. The fund will target urban assets with the goal to execute hands-on asset management initiatives to generate attractive risk-adjusted returns befitting a value-add profile. With a deep understanding of market dynamics, Boreal IM will adopt a bottom-up approach to assemble a geographically diversified portfolio that benefits from value creation that typically fall within four (4) categories: 1) lease optimisation, 2) refurbishment, 3) building extension, and 4) ground up development. By combining third party data with Boreal IM’s real-time, on-the-ground market knowledge, Boreal IM gains a competitive edge to deal sourcing, underwriting and execution.