Sabana Industrial Real Estate Investment Trust (Sabana REIT) announced, on Feb 28, that it has secured its first $150 million sustainability-linked loan from The Hongkong and Shanghai Banking Corporation Limited (HSBC).
The loan comprises a four-year tranche of $75 million and a five-year tranche of $75 million. The interest rate of the loan pegged to pre-determined annual energy and water intensity targets for Sabana REIT across its portfolio.
The REIT will be able to enjoy lower pre-agreed interest rates on the facility if the targets are met.
“We would like to thank HSBC for supporting our journey to advance our ESG goals as part of our broader strategy. Beyond giving us greater financial flexibility, this loan underscores our commitment to integrate sustainability in our operations, minimise our environment impact and deliver growth in a responsible manner,” says Lim Wei Huang, CFO of the manager.
“The pathway to a low-carbon future requires businesses across all sectors to review their approach to their operations. We are pleased to support Sabana REIT in taking this first step to secure sustainability linked financing, and in shifting the industrial sector towards more sustainable practices. In close collaboration, we have identified specific water and energy targets which, if fulfilled, will reduce interest repayments and will enable the REIT to make a measurable step on their sustainability journey,” says Regina Lee, HSBC Singapore’s head of commercial banking.
Units in Sabana REIT closed 0.5 cent lower or 1.10% down at 45 cents on Feb 25.
