SINGAPORE (May 28): CapitaLand has obtained a $500 million sustainability-linked loan from United Overseas Bank (UOB). The loan is the largest in Singapore’s real estate sector.
The four-year $500 million loan is CapitaLand’s fifth sustainability-linked loan, which is the highest number of such loans by a real estate company in Singapore.
In total, CapitaLand and its real estate investment trusts (REITs) have raised over $2.42 billion – through sustainable financing instruments – in less than two years, which reinforces the group’s commitment towards responsible growth.
The sustainability-linked loan from UOB is explicitly linked to CapitaLand’s wins in the Global Real Estate Sustainability Benchmark (GRESB), a leading environmental, social and governance (ESG) benchmark for real estate and infrastructure investments across the world. In the GRESB 2019, CapitaLand came in first place across four categories and was also awarded the highest tier rating of five stars in the Global ‘Diversified - Listed' category.
As the loan is tied to CapitaLand’s ESG performance, the group has the flexibility to use the loan proceeds for general corporate purposes. CapitaLand will also obtain interest savings as it maintains or improves its rating on the benchmark.
In CapitaLand’s 11th Global Sustainability Report released on Thursday, the Group reported that it has achieved utilities cost avoidance of $208 million in 2019 since 2009.
Last year, CapitaLand reported utilities cost avoidance of $170 million since 2009. In 2019, the Group’s energy and water consumption intensities were reduced by 19.2% and 22.4% respectively from the base year of 2008. CapitaLand also achieved a 29.4% reduction in carbon emissions intensity since 2008.
“Integrating CapitaLand’s ESG performance with our financial metrics demonstrates the Group’s long term focus on sustainability and responsible growth. CapitaLand continues to step up our ESG efforts and sustainable finance as they have delivered tangible returns for the Group. Through the sustainability-linked loans, CapitaLand has been able to capitalise on our achievements in ESG and add resilience to our capital position,” says Andrew Lim, Group Chief Financial Officer of CapitaLand.
“Notwithstanding the current economic climate, we have raised $1.5 billion in 2020 through sustainable finance… With the support of our partners like UOB for our sustainable financing efforts, CapitaLand will continue to shape a sustainable built environment and enhance the communities we operate in,” he adds.
“CapitaLand’s commitment to building sustainable cities and communities and this sustainability-linked loan, the largest to-date in Singapore’s real estate sector, exemplify the collaborative efforts we seek with our clients to help them achieve responsible growth,” says Leong Yung Chee, Head of Corporate Banking Singapore at UOB.
“CapitaLand has been a long-time participant in the annual GRESB Assessment and has shown a strong track record of adhering to best practices on material ESG issues,” says Ruben Langbroek, Head of Asia Pacific at GRESB.
“As the number of green financing instruments grows around the world, this is benefitting real estate companies and funds with a strong ESG performance, and provides important incentives for the industry to transition to a low-carbon, safe and resilient future,” Langbroek adds.
As at 9.28am, CapitaLand shares were changing hands at $2.92, up 0.7%.
