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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