Property
Property suitable for investment by charities is usually commercial property. This can either be bought directly or through investing in a pooled property fund.
Most property investing involves buying already built commercial property and renting it out, but it can also entail investing in a property development for future sale.
There are environmental, social and community aspects of property that you may wish to consider.
Environmental issues
These mainly relate to issues such as: energy efficiency, climate control, waste management, water consumption and pollution.
Social and community issues
These include
- accessibility
- regeneration
- the location of developments – building on greenfield or brownfield sites
- the use a building will be put to – avoiding investments in buildings where the tenant is involved in activities which contradict the work of the charity or potentially risk the charity’s reputation
- the construction process – the sourcing of materials and the use of local labour
A property investor has obligations both for the property and towards the tenants.
In relation to the tenant the scope for Responsible Investment could include screening out certain types of tenants (although few funds offer this) or helping tenants to make their operations more environmentally and socially sustainable.
Engagement
If your charity invests directly in property you are likely to be much closer to the impact of your investment than with equity investment. Engagement can be hard hitting: in a new development, you may be able to influence how it is designed and built. As you are likely to be dealing with a handful of companies, you can also have a deeper engagement with property developers and builders (as opposed to engaging as part of an equity portfolio with a large number of holdings).
Positive screening
Your charity could specifically invest in environmentally sustainable new buildings through the development process and in existing buildings where energy usage and emissions are controlled.
Our Pooled Funds guide provides some examples of property funds.