Despite CapitaLand China Trust’s (CLCT) AU8U challenging year during China’s various lockdowns since the onset of Covid in 2020, the manager continues to pivot towards a greener future.
During 2022, CLCT participated in the Global Real Estate Sustainability Benchmark (GRESB) Real Estate Assessment and scored a GRESB Public Disclosure rating of “A”.
To further its green initiatives, CLCT secured $300 million worth of sustainability-linked loans in FY2022, double the $150 million it secured from United Overseas Bank U11 in September 2021. The REIT’s maiden sustainability-linked loan in 2021 marked the first time an S-REIT did so for a China portfolio.
Among the $300 million in sustainability-linked loans drawn last year, Tan Tze Wooi, CEO of the manager, says a portion are onshore loans tied to CapitaMall Xuefu, CLCT’s downtown mall located in the Nangang district of Harbin, the capital and largest city of the Heilongjiang province.
In FY2022, CLCT increased its sustainability-linked loans to form 13% of its total outstanding loan of some $2 billion. “When we look at various sources of funding, the sustainability-linked loan is where we are trying to move towards,” says Tan.
Under the terms of sustainability-linked loans, CLCT will enjoy interest rate reductions should it meet pre-determined sustainability performance targets, such as lowering emissions and reducing energy and water usage.
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These metrics will be compared against CLCT’s figures from a 2008 baseline. During the year, CLCT obtained LEED Gold certification for CapitaMall Wangjing and Rock Square, accrediting them as energy-efficient buildings with reduced carbon emissions.
The REIT also implemented green leasing across its retail and business park portfolio in 4Q2022, which encourages tenants to incorporate environment-friendly features in their premises and adopt sustainable practices.
CLCT also installed 253 solar panels on the roof of Kunshan Bacheng Logistics Park, which is expected to generate 92 MWh of energy annually, translating to a reduction of 9,000 kg in carbon emissions per year.
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Tan says CLCT’s management has a “clear KPI” tied to greening its portfolio. This is part of CapitaLand’s 2030 Sustainability Master Plan, launched in October 2020 and updated in May 2022 with a 2050 net-zero commitment.
By the end of this decade, CLCT’s sponsor, CapitaLand Investment (CLI) 9CI , aims to cut absolute Scope 1 and 2 emissions by 46% from a 2019 base year. This is up from the 28% target it set out in the original 2020 masterplan.
“Why did we choose 2019? It’s recent and we didn’t want it to be muddled by Covid-19 data. Even today, our data is not reflective of the 2019 business-as-usual,” says CLI’s chief sustainability officer Vinamra Srivastava at a November 2022 briefing.
