REIT ASIAPAC
Notable REIT Sustainability Financing Activities For the First Half of 2021
Company Type Date Amount Purpose
Ascott Residence Trust |
Loan |
January 24 , 2021 |
US $ 37.2 million |
Proceeds from the green loan will finance ART ’ s maiden development project and co-living property ’ lyf one-north Singapore . The 324-unit co-living property will be fitted with green energy-efficient and smart building features . |
Link REIT |
Loan Conversion |
January 15 , 2021 |
US $ 273.6 million |
The proceeds of the loan will be used for general corporate funding purposes , including sustainability initiatives . |
GLP |
Loan |
February 23 , 2021 |
US $ 658 million |
GLP will use the loan proceeds to contribute to environmental objectives related to climate change mitigation and the promotion of green buildings . |
Manulife US REIT Loan March 24 , 2021 US $ 250 million
Far East Hospitality Trust Loan March 30 , 2021
Frasers Centrepoint Trust ( FCT ) 40 % - Owned Company Sapphire Star Trust ( SST )
US $ 92.72 million
Loan May 20 , 2021 US $ 438 million
Targets include efficeint use of energy and water and mangement of greenhose gas ( GHG ) emissions
The loan will be used to refinance Far East H-Trust ’ s existing bank borrowings with the loan ’ s interest margin being tied to selected sustainability targets set together with OCBC Bank .
The loan will be used to refinance existing borrowings for working capital and general corporate funding requirements of SST in relation to Waterway Point . in Singapore to secure a green loan .
Also , in January , Hong Kong ’ s Link REIT announced that it had converted two five-year loans totalling £ 200 million ( US $ 273.6 million ), signed with BNP Paribas and DBS Bank ( DBS ) respectively , in August last year to sustainability-linked loans . This marks Link REIT ’ s first sustainability-linked loan denominated in the Pound Sterling .
Several REITs also made the move in the same direction .
In March this year , Manulife US REIT ( MUST ) and Far East Hospitality Trust secured both their maiden sustainability-linked loan .
MUST obtained a US $ 250 million unsecured sustainabilitylinked loan from DBS and OCBC Bank , with both banks acting as sustainability advisors for the transaction . This is also MUST ’ s first sustainability-linked loan .
Far East Hospitality Trust , meanwhile , secured its maiden sustainability-linked loan facility worth S $ 125 million ( US $ 92.72 million ) for a term of 5 years from OCBC Bank , which is the sole lender for this transaction .
Elsewhere in Asia , budding REITs have also expressed their intention to tap “ green ” sources of funds .
Just recently , the Philippines ’ Filinvest Group said it is eyeing support from sustainability-focused investors for its upcoming P14.9 billion ( US $ 310 million ) REIT offering in July .
In Malaysia , Sunway REIT and OCBC Bank announced that they are set to collaborate on sustainable finance initiatives in June .
These schemes and efforts come as the corporate commitments towards net-zero carbon emission gain traction globally . According to a JLL survey of 550 corporate real estate leaders released in June , 70 % of Asia Pacific corporations indicated that they were willing to pay a rental premium to lease sustainabilitycertified buildings in the future .
Regulators are also catching up . In mid-June , the Singapore Exchange ( SGX ) launched what it calls the world ’ s first environmental , social and governance ( ESG ) REIT derivatives . These derivatives aim to meet rising demand for integrating ESG considerations into investment portfolios .
While green loans are used to fund projects that meet certain benchmarked green criteria , sustainability-linked loans generally do not restrict the use of proceeds . However , for the latter , borrowers will have to commit to sustainability performance targets and are awarded a reduction in interest rates if they meet the targets .
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