Lendlease Global Commercial REIT (LREIT), on Feb 23, announced that it has secured a sustainability-linked loan of $860 million from Citi, DBS and OCBC. The sustainability-linked loan is the REIT’s first. It is also the largest amongst the REITs in the Asia-Pacific region to date.
The proceeds of the loan will go towards funding the acquisition of Jem, as well as for general corporate and working capital purposes.
The loan incorporates interest rate reductions linked to pre-determined sustainability performance targets, which will allow the REIT to enjoy savings in borrowing costs as it achieves these targets.
To be sure, LREIT follows a zero investment roadmap in a bid to drive “true sustainability”, says the REIT in its Feb 23 statement.
The roadmap includes increasing the use of renewable energy by 2030, implementing energy efficiency initiatives to maintain top performance in green building ratings, and trialling alternative fuels and phasing out fossil fuel for backup generators on assets.
Kelvin Chow, CEO of the manager says, “We are delighted to set a new industry benchmark and push for greater sustainability performance with our inaugural sustainability-linked loan, made possible with the support of our partners, Citi, DBS and OCBC.”
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“We have been steadily elevating the sustainability performance of LREIT’s portfolio in Singapore and this injection of capital reflects our commitment to our decarbonisation roadmap that will deliver long-term sustainable growth and value for the built environment, our assets and stakeholders,” he adds.
LREIT’s portfolio comprises a leasehold interest in 313@somerset and a freehold interest office complex, comprising three grade-A office buildings located in Milan, Italy. It also currently holds an effective 31.8% indirect interest in Jem.
As at 11.41am, units in LREIT are trading flat at 83 cents.
Photo: The Edge Singapore
