The Hines Pan European Core Fund (HECF) has been recognized as the most sustainable fund in Europe of all diversified portfolios and Global Sector Leader in Real Estate Assessment by GRESB for an unprecedented third consecutive year.
GRESB, the leading Environmental, Social and Governance (ESG) benchmark for real estate and infrastructure investments across the world, has awarded HECF, an open-ended non-listed pan-European core fund, the highest possible rating of five Green stars out of five, underpinning the “best of the best” accolades. HECF also ranked first in several categories, most notably in the Global diversified Funds category out of 230 entrants and amongst its peer group in Europe consisting of 117 Funds. HECF also ranked 11th globally among all 964 vehicles that participated in the survey this year.
The award demonstrates HECF’s ongoing commitment toward incorporating the highest levels of sustainability aspects across the portfolio. Furthermore, the results provide evidence of the strong quality of the assets and organizational structure supporting HECF to achieve its objectives.
Daniel Chang, Managing Director Hines and responsible for HECF Asset Management, said: “More than ever, sustainability in buildings is becoming synonymous with innovation, efficiency, and tenant health and well-being. As a firm with an entrepreneurial spirit and a wealth of expertise and experience, we are well-positioned to integrate these sustainability technologies and innovations.”
Peter Epping, Senior Managing Director Hines and Fund Manager HECF, said: “Many investors are looking to future-proof their returns through sustainability, and in particular, long-term institutional investors embrace the opportunity to align their CSR with a real estate investment proposition that is sustainable.”
Sander Paul van Tongeren, Managing Director at GRESB, said: “We can’t solve global problems without a global benchmark to show us where we stand and how far we need to go. That’s why we are pleased to announce another increase in GRESB’s benchmark coverage and congratulate all 1,505 companies, funds and assets that reported on their ESG performance this year.”
The Hines Pan-European Core Fund was set up in 2006 with the aim of providing investors with a resilient income profile derived from a diversified portfolio of high-quality assets located in inner-city locations across major European cities.
The Fund combines disciplined sustainable management policies with a risk-adjusted return profile and has been awarded the European leadership in the GRESB ranking for three years while delivering an average net total return of 8.2 percent over the last five years, with an income return of 3.5 percent.
The Fund has continually improved asset level performance of buildings by working in close collaboration with the local Hines teams and property managers and engaging tenants in a variety of ways. An example of this has been the drive to optimize the energy consumption of the buildings, resulting in a 12 percent reduction in like-for-like consumption since 2016. The total return of 8.4% achieved in 2018 illustrates that sustainability improvements could also be combined with strong performance for the Fund’s investors.
Increasingly, the expectation from investors, tenants and other stakeholders from real estate owners to address the environmental impact of buildings is growing. Furthermore, the recognition of sustainability as a long-term driver of performance is being realized, with many investors looking to future-proof their returns through sustainability.
As of Q2 2019 the HECF portfolio was 97.1 percent occupied with an aggregate value in excess of €1.3 billion. The portfolio of the Fund is currently composed of 21 assets invested in 15 city markets across 8 different European countries. The Fund has achieved an average return of 8.7 percent per annum over the past five years.
