Monday, 13 July 2020

CapitaLand obtains $352 million sustainability-linked bilateral loan from UOB

CapitaLand obtained about $352 million (SGD 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 the 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 $1.7 billion (SGD 2.42 billion) in less than two years, through sustainable financing instruments, reinforcing the group’s commitment towards responsible growth. 

The four-year $352 million (SGD 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 (GRESB), an 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 to about $423 million (SGD 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.

CapitaLand’s group chief financial officer Andrew Lim 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 $1.96 billion (SGD 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,” Lim added.

On the other hand, UOB ‘s head of corporate banking in Singapore Leong Yung Chee 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.”

In addition, GRESB’s head of Asia Pacific Ruben Langbroek 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,” Langbroek also said.

CapitaLand achieves utilities cost avoidance of about $147 million (SGD 208 million) since 2009

In CapitaLand’s 11th Global Sustainability Report, the Group reported that it has achieved utilities cost avoidance of about $147 million (SGD 208 million) in 2019 since 2009. In the previous year, CapitaLand reported utilities cost avoidance of about $120 million (SGD 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’s 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 while 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,” Lee concluded. 

Re-disseminated by The Asian Banker

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