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Climate Change Capital

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Title: Climate Change Capital


1
Climate Change Capital Investing in Low Carbon
Property Green Alpha?
2
Climate Change Capital
Climate Change Capital (CCC) is an investment
manager and advisor specialising in the
opportunities created by the transition towards
the low carbon economy. Our activities aim to
make the worlds environment cleaner while
delivering attractive financial returns.
Headquartered in London with an office in
Beijing, CCC focuses on the regions of the EU,
North America and Asia.
3
Annual global flow of energy - 88 conversion loss
Source J.M. Alwood and J.M. Cullen, University
of Cambridge
4
Climate Change Property Fund UK Urban non
car dependant city centres no flood risk
2nd Investment Edinburgh
1st Investment Birmingham
Location, Economics, Sustainability
5
UK carbon emissions The built environment
Commercial19
Residential28
Source BRE, GVA Grimley
6
Regulatory change
  • 20-20-20 goals set down by the European Union
  • 20 of consumed energy to be renewable
  • 20 increase in energy efficiency
  • 20 reduction in emissions
  • Energy Performance of Buildings Directive adopted
    in 2002
  • Certification of buildings based on its relative
    energy performance (EPCs)
  • Required in UK for all large buildings occupied
    by public authority or relevant institution by
    October 2008 (DECs)
  • UK Buildings regulations Zero Carbon by 2019
  • Climate Change Bill introduced by UK Government
    in November 2008
  • Reduction in emissions levels by 26-32 by 2020
    and 60 by 2050
  • 5 year carbon budgets
  • UK Carbon Reduction Commitment (CRC) Carbon
    cap/trade on Property portfolios that consumed gt
    6,000 kw/h per annum in 2008
  • Trend in Regulation and Legislation
  • Increasingly onerous and weighted toward fiscal
    penalty rather than incentive

By 2020 (compared to 1990)
7
Carbon Reduction Commitment Energy Efficiency
Scheme (CRC)
  • CRC is a cap and trade scheme financial
    incentives/penalties for large occupiers
    investors to improve energy efficiency
  • Organisations with total electricity consumption
    over 6,000MW hrs/yr (typically 500,000 pa)
  • A league table of performance will be published
    each year
  • CRC brings carbon penalties to existing buildings
    in the UK

Canary Wharf thermal image
Canary Wharf lights at night
8
Potenziale in bestehenden Objekten
  • Economization of Heat Energy 67
  • - Change heating system from gas to district
    heating
  • Installation of heat recovering systems
  • New Facade
  • Solar plant on the roof
  • Economization of Electricity 55
  • - Innovative climatisation concept
  • - New Façade
  • Intelligent lighting control system
  • Innovative elavator technique

Economization of Water 43 - Rain water use -
Techniques for water conservation - Use of grey
water for toilet flush
  • Need for ventilation energy 60
  • - Change of climatisation concept
  • Heat/cooling transfer via water system
  • Natural ventilation

CO2- Emissions 55 - Installation of energy
saving systems - Use of district heating - Use of
green power
  • Recycling Material 30
  • - Reuse raised floor
  • - Recycling window glazing
  • Recycling Facade

Heat Island Effect 50 - Green roofs -
Photovoltaik plant on the roof - Solar plant on
the roof
Green Buildings Referenzen (Auszug)
9
Empire State Building Integrated
sustainability refurbishment programme
  • The plan is projected to
  • Cost 13.2 million (on top of a planned 500
    refurbishment) with payback in 3 years -
    through energy operational savings
  • Reduce energy use by up to 38
  • Achieve annual savings of 4.4 million
  • Reduce carbon emissions by 105,000 metric tons
    over the next 15 years
  • Be complete within two years
  • Serve as a global model for owners of existing
    buildings

10
5 St Philips Place, Birmingham, UK
Prime offices let to UK Government for 10 years
750,000 (lt 5 year payback) spent on Energy
Efficiency Improvements by Landlord Tenant
  • Electricity costs reduced by 45 (60 Gross)
  • Carbon emissions reduced by 43 (63 Gross)
  • Green Lease Landlord and tenant share data
    (Energy/Water/Waste/Carbon)

11
Sustainable asset management The journey
5 St Philips Place Offices Annual CO2
emissions, DEC Grades and benchmarks from Energy
Consumption Guide 19 for a Type 3
air-conditioned office Kg/m² Treated Floor Area
at Defra 2008 CO2 factors of 0.185 for gas and
0.537 for electricity
12
Why Green buildings will outperform
If Investment Implications Underlying Effects on Green Assets
Tenants prefer to occupy green buildings Green assets let more quickly Rental growth higher and lower depreciation Shorter cash flow risk
Green buildings lower operating costs More tenant money is available for rent Rental growth higher and lower depreciation
Government regulation and legislation Greener assets de-risked as more attractive to and retain tenants better Lower risk premium than brown buildings
Investors have fiduciary duty to invest in green buildings Green properties more liquid Green properties are more liquid should attract a lower risk premium higher value Green Alpha
Original Source IIGCC
13
Low carbon property investment the new
mainstream
  • Prime investment now encompasses sustainability
  • Investment downside risk protection value
    upside
  • Low growth, banking crisis gt Cash flow
    fundamentals
  • Rents 6-8 ,Capital Values 16
    (Maastricht/Berkeley) more UK pan European
    research in hand
  • Low carbon property is mispriced
  • No need to trade return for Green
  • gt Green Alpha

14
Contact Climate Change Capital
Tim Mockett Tim Mockett is co-founder of CCPF
(Climate Change Property Fund), the first low
carbon property fund investing in mainstream UK
commercial assets. Having raised c. 70m equity,
the fund is now 100 invested in core assets in
London, Edinburgh, Birmingham and Manchester with
a GAV of approximately 150m. Prior to CCC, Tim
was Property Director of Stow Securities plc
where he was responsible for the implementation
of Stow's UK and European investment strategy. In
his seven years at Stow, Tim created an
investment/development portfolio consisting of
assets with a gross value of 200m, including
mixed use, office and retail properties
principally within Greater London. Tim has over
25 years of experience in commercial property
investment and development advising and
representing a range of investors, and has
invested in and traded over 1bn of commercial
property during this period, generating a typical
portfolio IRR of over 15 pa.
  • CCC Head Office
  • Climate Change Capital
  • 3 More London Riverside
  • London
  • SE1 2AQ
  • United Kingdom
  • Tel 44 (0)20 7939 5000
  • Fax 44 (0)20 7939 5030
  • www.climatechangecapital.com
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