Lendlease Global REIT secures $631 million sustainable loan
Lendlease Global Commercial REIT has secured a S$860 ($631m) million sustainability-linked loan to buy a Singapore shopping centre.
The real estate investment trust (REIT) manager said the unsecured loan from Singaporean and international banks Citi, DBS and OCBC was the largest sustainability-linked loan for an Asian REIT.
The loan incorporates interest rate reductions linked to predetermined sustainability performance targets, allowing the REIT to enjoy savings in borrowing costs as it achieves these targets through its portfolio in Singapore.
Proceeds from the loan will be used to fund the acquisition of Jem, a 580,000 sq ft suburban mall in Jurong, Singapore. The REIT previously owned a 31.2% stake, but bought out the remaining 68.2% from funds managed by Lendlease, sponsor of the REIT.
Lendlease has committed to achieve net zero carbon for Scope 1 and 2 emissions by 2025 and absolute zero carbon emissions across all its operations by 2040. Measures undertaken include energy efficiency initiatives, increasing the use of renewable energy, green leases and partnering with tenants to reduce emissions.
Kelvin Chow, CEO of the REIT manager, said: “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.
“We have been steadily elevating the sustainability performance of Lendlease Global Commercial REIT’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.”