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CapitaLand obtains S$500 million sustainability-linked bilateral loan – the largest in Singapore’s real estate sector

Capitaland Raffles
  • Over S$2.42 billion in total raised through sustainable finance in less than two years underscoring CapitaLand’s commitment to responsible growth
  • Records utilities cost avoidance of S$208 million since 2009 in latest Global Sustainability Report

CapitaLand has obtained a S$500 million sustainability-linked loan from United Overseas Bank (UOB), in tandem with the Group’s release of its 11th Global Sustainability Report which reports its sustainability performance in financial year 2019.  The loan is the largest sustainability-linked bilateral loan in Singapore’s real estate sector.  In total, CapitaLand and its real estate investment trusts have raised over S$2.42 billion in less than two years, through sustainable financing instruments, reinforcing the Group’s commitment towards responsible growth.

Andrew Lim, Group Chief Financial Officer, CapitaLand Group said: “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.  Notwithstanding the current economic climate, we have raised S$1.5 billion in 2020 through sustainable finance.  It is testament to the trust that our financial partners have in CapitaLand.  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.”

In CapitaLand’s 11th Global Sustainability Report released today, the Group reported that it has achieved utilities cost avoidance of S$208 million in 2019 since 2009.  In the previous year, CapitaLand reported utilities cost avoidance of S$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.

In CapitaLand Group Chief Executive Officer’s message within the sustainability report, Lee Chee Koon said: “For CapitaLand, true sustainability is the ability to weather the storm and emerge stronger.  As a responsible global real estate company, we place sustainability at the core of what we do by contributing to the environmental and social well-being of our communities as we deliver long-term economic value.  We are committed to navigating these difficult times with our staff, tenants, customers and partners in the ecosystem whilst ensuring our efforts are sustainable for our shareholders.  CapitaLand has a strong balance sheet and we stand ready to capitalise on strategic opportunities for long-term growth.  The COVID-19 pandemic has raised global awareness of the importance of ESG, as major disruptions to businesses can come from anywhere, including the environment.  We are reviewing CapitaLand’s sustainability strategy with a view to setting a more ambitious sustainability roadmap, which will allow CapitaLand to better future-proof our company.”

CapitaLand obtains S$500 million sustainability-linked

bilateral loan – the largest in Singapore’s real estate sector

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  • Over S$2.42 billion in total raised through sustainable finance in less than two years underscoring CapitaLand’s commitment to responsible growth
  • Records utilities cost avoidance of S$208 million since 2009 in latest Global Sustainability Report

Singapore, 28 May 2020 – CapitaLand has obtained a S$500 million sustainability-linked loan from United Overseas Bank (UOB), in tandem with the Group’s release of its 11th Global Sustainability Report which reports its sustainability performance in financial year 2019.  The loan is the largest sustainability-linked bilateral loan in Singapore’s real estate sector.  In total, CapitaLand and its real estate investment trusts have raised over S$2.42 billion[1] in less than two years, through sustainable financing instruments, reinforcing the Group’s commitment towards responsible growth.

The four-year S$500 million sustainability-linked loan from UOB is CapitaLand’s fifth sustainability-linked loan, the highest number of sustainability-linked loans obtained by a real estate company in Singapore.  To date, CapitaLand has partnered with seven financial institutions to secure a total of 12 sustainable financing instruments comprising sustainability-linked loans, green loans and green bond.

The sustainability-linked loan from UOB is explicitly linked to CapitaLand’s achievements in the Global Real Estate Sustainability Benchmark[2] (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 the leader in the Global ‘Diversified – Listed’ category with the highest tier rating of 5 stars.

Given that the sustainability-linked loan is tied to the ESG performance of CapitaLand as a Group and not any specific project or property, CapitaLand has the flexibility to use the loan proceeds for general corporate purposes, unlike green loans where proceeds are specifically used for green projects.  In addition, CapitaLand will obtain interest savings as it maintains or improves its rating on the benchmark.

CapitaLand had achieved interest savings on its existing sustainability-linked loans totalling S$600 million, with Credit Agricole Corporate & Investment Bank, DBS, Natixis Bank and Société Générale.  These sustainability-linked loans are explicitly linked to CapitaLand’s ESG efforts to maintain its listing on the Dow Jones Sustainability World Index.

Mr Andrew Lim, Group Chief Financial Officer, CapitaLand Group said: “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.  Notwithstanding the current economic climate, we have raised S$1.5 billion in 2020 through sustainable finance.  It is testament to the trust that our financial partners have in CapitaLand.  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.”

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Mr Leong Yung Chee, Head of Corporate Banking Singapore, UOB, said: “At UOB, as we support the financial needs of our clients, we also pursue opportunities to progress our collective ESG responsibilities.  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.”

Mr Ruben Langbroek, Head of Asia Pacific at GRESB, said: “GRESB assesses and benchmarks the ESG performance of real estate companies and funds, providing standardised and validated data to the most sophisticated capital providers in the property sector.  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.  It’s great to see their ongoing commitment to further enhance their ESG performance demonstrated by this latest sustainability-linked loan based on their GRESB scores.  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.”

CapitaLand achieves utilities cost avoidance of S$208 million since 2009

In CapitaLand’s 11th Global Sustainability Report released today, the Group reported that it has achieved utilities cost avoidance of S$208 million in 2019 since 2009.  In the previous year, CapitaLand reported utilities cost avoidance of S$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 20083.  CapitaLand also achieved a 29.4% reduction in carbon emissions intensity since 2008[3].

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In CapitaLand Group Chief Executive Officer’s message within the sustainability report, Mr Lee Chee Koon said: “For CapitaLand, true sustainability is the ability to weather the storm and emerge stronger.  As a responsible global real estate company, we place sustainability at the core of what we do by contributing to the environmental and social well-being of our communities as we deliver long-term economic value.  We are committed to navigating these difficult times with our staff, tenants, customers and partners in the ecosystem whilst ensuring our efforts are sustainable for our shareholders.  CapitaLand has a strong balance sheet and we stand ready to capitalise on strategic opportunities for long-term growth.  The COVID-19 pandemic has raised global awareness of the importance of ESG, as major disruptions to businesses can come from anywhere, including the environment.  We are reviewing CapitaLand’s sustainability strategy with a view to setting a more ambitious sustainability roadmap, which will allow CapitaLand to better future-proof our company.”

For Mr Lee’s full message and CapitaLand’s 2019 Global Sustainability Report, please  download here

Annex A – CapitaLand has raised over S$2.42 billion in less than two years through sustainable finance

CapitaLand and its real estate investment trusts have raised over S$2.42 billion in less than two years, through sustainable financing instruments, reinforcing the Group’s commitment towards responsible growth.

In May 2020, CapitaLand secured a four-year S$500 million sustainability-linked loan from United Overseas Bank (UOB).  This is the Group’s fifth sustainability-linked loan, the highest number of sustainability-linked loans for a real estate company in Singapore.

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In April 2020, CapitaLand secured two green loans worth S$400 million to catalyse greening of its global portfolio.  A S$150 million four-year green loan is provided by DBS while the S$250 million three-year multi-currency green loan is provided by The Hongkong and Shanghai Banking Corporation Limited – Singapore Branch (HSBC).

In 1Q 2020, CapitaLand Commercial Trust (CCT) obtained S$600 million of green loans from HSBC, UOB and Oversea-Chinese Banking Corporation Limited (OCBC).

In December 2019, CCT set up a Sustainability Financing Framework which allowed CCT to secure funding from like-minded sustainability-centric investors.  Under this Framework, CCT issued its first green bond comprising JPY10.0 billion (S$124.7 million) of unsecured bonds due in November 2027.

In October 2019, CapitaLand Mall Trust made its first foray into green financing to secure a S$200 million, five-year green loan from OCBC to finance or refinance its properties that have achieved Building and Construction Authority’s Green Mark certification.

In July 2019, CapitaLand clinched sustainability-linked loans with Credit Agricole Corporate & Investment Bank, Natixis Bank and Société Générale to raise a total of S$300 million, adding to the S$300 million sustainability-linked loan from DBS in October 2018.

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Annex B – CapitaLand recognised as a leader in sustainability on GRESB

In 2019, CapitaLand and its real estate investment trusts came in first place across four categories in the Global Real Estate Sustainability Benchmark (GRESB).  Globally, CapitaLand was the leader in the Global ‘Diversified – Listed’ category with the highest tier rating of 5 stars.  The ‘Diversified – Listed’ category includes publicly listed real estate companies with a diversified portfolio mix of asset types i.e. offices, retail, hospitality etc.  In the region, CapitaLand was also the leader in the Asia-Pacific ‘Diversified’, Asia ‘Diversified’ and Asia ‘Diversified – Listed’ categories.

CapitaLand Mall Trust (CMT) came out top in the Asia ‘Retail – Listed’ category.  CapitaLand, CMT, CapitaLand Commercial Trust and CapitaLand Retail China Trust also scored ‘A’ for public disclosure in GRESB 2019.

GRESB was established in 2009 by a group of large pension funds who wanted to have access to comparable and reliable data on the Environmental, Social and Governance (ESG) performance of their investments.  In the intervening years, it has grown to become the leading ESG benchmark for real estate and infrastructure investments across the world.

GRESB’s ESG data covers US$4.5 trillion in real estate and infrastructure value and is used by more than 100 institutional and financial investors to make decisions that are leading to a more sustainable real asset industry.

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For more information, please visit: https://gresb.com/about/

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