Logistics player GLP has issued its first sustainability-linked loan of US$658 million, touted as the largest SLL in the Asia Pacific ex-Japan real estate sector.
The loan, extended by ten banks, was led by Dutch lender ING.
The three-year revolving credit facility was structured as an SLL tied to GLP’s latest Sustainalytics Environmental, Social and Governance (ESG) risk rating.
Under the facility, GLP is committed to improving its ESG Risk Rating score which reflects its performance in various ESG metrics. The loan features a two-tier incentive mechanism where GLP will be entitled to an interest rate reduction when targeted improvements in its ESG performance score are achieved.
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“The size of the facility is a testament to GLP’s ongoing commitment to driving the sustainability agenda and we are encouraged by the high levels of investor interest,” says GLP’s global treasurer Edwin Tey. “We look forward to using the proceeds of this loan to sustainably enhance our assets and the communities in which we work.”
Robert Scholten, ING’s Asia Pacific head of real estate finance notes that despite the general economic fallout from the COVID-19 pandemic, the region’s real estate sector remains a bright spot, where logistics has proven to be among the most resilient asset classes in 2020.
“We expect the real estate industry to continue on its growth trajectory this year, primarily led by the logistics sector. Retail and hospitality assets have taken a beating, and we see downward pressure on yields of office spaces,” says Scholten.
“At the same time, COVID-19 has accelerated the already prominent shifts to e-commerce and digitalisation, particularly in the region, which will further boost demand for logistics facilities and data centres,” he adds.
In 2020, ING supported 63 green, social and sustainability bonds and 37 sustainability-linked loans.
Worldwide, green financing is a growing market. Just within the fourth quarter of 2020, some US$244 billion worth of sustainable debt was issued globally, up 22% q-o-q and 19% y-o-y.
For the whole of 2020, some US$732 billion was issued, bringing cumulative total to US$2.3 trillion.
