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Knight Frank has appointed Jackie Cheung to director of ESG for Asia-Pacific.

In his new role, Cheung will be responsible for leading Knight Frank’s ESG efforts in the region, providing advisory services to clients and integrating ESG considerations into internal decision-making. He will be based in Singapore.

Cheung joined Knight Frank in Hong Kong in 2022 as associate director and head of ESG for Greater China.

Tim Armstrong, global head of occupier strategy and solutions at Knight Frank, said: “Integrating ESG factors into portfolio planning is no longer optional but a strategic imperative, and we are committed to serving as a trusted ESG advisor for our clients.”

A new roadmap has been created to help Hong Kong on the path to net zero.

The city’s government has set a target of achieving net zero emissions by 2050 and has also committed to halve total carbon emissions by 2035, from 2005 levels.

The Australian Chamber of Commerce in Hong Kong (Austcham), supported by Savills as knowledge partner, has produced a roadmap for the city to drive decarbonisation of the city by 2050. Input for the roadmap was gathered from industry, government and bodies such as the Hong Kong Green Building Council (HKGBC) and Business Environment Council.

Sam Crispin, sustainability and ESG lead at Savills Asia Pacific, said the real estate industry and asset owners will be crucial partners in ensuring that Hong Kong meets its decarbonisation targets.

“The built environment accounts for 90% of electricity consumption in Hong Kong. Our decarbonisation road map sets out the key steps that cross industry collaboration can address. This is not the sole responsibility of regulators and organisations, every one of us has a role to play.”

While the challenge of decarbonisation is enormous, the Savills report found that strong foundations have been laid and the Hong Kong building and construction industry already has most of the key elements needed to decarbonise.

However, Dr Cary Chan, executive director of the HKGBC, noted that “existing building sustainability initiatives only cover a small portion of the city’s energy consumption, with the majority of smaller developers yet to adopt sustainable practices”.

Key challenges include bringing decarbonisation to the forefront of the mainstream business agenda, encouraging retrofitting, increasing data transparency, increasing green certification of existing buildings, improving education and boosting capital allocation to sustainable investments.

A version of this story was previously published in Prospects and the roadmap can be found here.

ESR has closed a ¥JPY 22 billion ($146m) cross-border syndicated Sustainability-Linked Loan (SLL).

The loan is the first of its kind for the Hong Kong-listed real estate investment manager and brings its total SLL financing to approximately $4.4 billion. It has a tiered incentive mechanism where ESR will be entitled to an interest reduction when sustainability targets are achieved.  

The proceeds will be used for refinancing of existing borrowings, investments, working capital and general corporate purposes. The loan consists of five and seven year tranches and it is a unsecured, committed facility.

Mizuho Bank acted as sole mandated lead arranger and bookrunner, as well as sole sustainability coordinator.

Jeff Shen and Stuart Gibson, co-founders and co-CEOs of ESR said: “ESR is committed to integrating sustainability into our business. Our latest SLL underpins our ESG efforts, marking yet another step towards our sustainability and financial goals in tandem. 

“ESR remains focused on striving to not only enhance the performance of our assets and operations, but also lead and set the standard for sustainable development of our industry.”

Leading Asia Pacific real estate owners and occupiers have ambitious net zero targets, but the sector is far from achieving them.

CBRE this week released its Asia Pacific Real Estate Chief Sustainability Officer Survey, a wide-ranging report based on interviews with 41 Asia Pacific landlords and 26 investors in the Asia real estate. 

The report shows progress on a number of levels in the region. More than four-fifths (84%) of respondents believe a chief sustainability officer (CSO) or similar is an essential role, three-quarters of asset owners have used green finance and nearly half (44%) of prime office stock is green-certified.

However, the report also reveals both varying ambitions and huge gulfs between ambitions and practical possibilities, especially with regard to decarbonisation. 

Most (70%) Asia Pacific landlords have a net zero goal of 2050 of earlier, and more than half (53%) of corporate occupiers are targeting 2030. However, the likelihood of such targets being met is slim, as they are out of sync with national goals. 

China, India and Indonesia, responsible for one third of global carbon emissions, have set net zero targets of no earlier than 2060. CBRE notes: “the need to balance sustainability goals with economic objectives poses a significant challenge”, adding that Asia Pacific emissions have kept rising since the 2015 Paris Agreement.

Meanwhile, markets such as Singapore and Hong Kong appear to have a narrow chance of hitting their 2050 targets given their infrastructure limitations. Singapore did not set a net zero target until 2022, having previously said its reliance on imported power made such a target unrealistic.

Occupiers and owners are using electrification and energy efficiency to drive decarbonisation, however the energy intensity of the grid in most nations in the region is much higher than in the US and Europe. On-site renewables meanwhile, “can only account for a low percentage of consumption,” CBRE says.

The ability of Asia Pacific real estate occupiers to achieve net zero by 2030 will be particularly challenged by these factors, CBRE says. It also notes that only 40% of occupiers take account of Scope 1,2 and 3 emissions and 38% do not use scope categories at all. 

Asia Pacific CSOs cite infrastructure limits as the leading obstacle to achieving net zero, along with competing business priorities, uncertain costs and a lack of policy incentives.

A clear majority of the CSOs surveyed say increased collaboration between landlords will be crucial to meeting decarbonisation goals and CBRE suggests that landlords should align their net zero goals with those of their tenants. 

The broker also suggests firms should match their ESG objectives with wider business aspirations - something CSOs cite as a major challenge - and that they should be more active in lobbying and driving policy.  

India’s real estate sector is embracing sustainability and building a green future, a new report from KPMG claims.

The consulting firm’s Navigating the dynamics of real estate in India report, published in conjunction with India’s National Real Estate Development Council, says the industry is increasingly adopting renewable energy sources, particularly solar power, in alignment with India’s goals for a cleaner and more sustainable energy mix.

Data show that 82% of new Grade A office supply as of September 2023 was green certified. Construction and maintenance practices now integrate circular economy principles, promoting the reuse and recycling of materials, KPMG claims. 

Sustainability measures are implemented throughout the entire value chain, bolstered by government initiatives such as the Green Rating for Integrated Habitat Assessment (GRIHA) and tax incentives which encourage developers to embrace sustainable design.

Singapore’s City Developments Limited has been rated the most sustainable real estate company in the world for the sixth consecutive year.

The accolade came in the Corporate Knights Global 100 list, now in its 20th year. This annual ranking of the world’s 100 most sustainable corporations is based on the sustainability research firm’s assessment of 6,700 publicly traded companies with revenues over $1 billion.

CDL group chief executive Sherman Kwek said: “We are honoured to be recognised again as the world's most sustainable real estate company on the Global 100 Most Sustainable Corporations in the World listing. This accolade reaffirms our commitment to a climate-positive future and achieving our initial net-zero goals by 2030. By embracing innovation, collaboration and sustainable practices, we can reduce our carbon footprint and inspire a collective shift towards a net zero future."

Companies are assessed across 25 key performance indicators, including their percentage of sustainable revenue and sustainable investment, taxes paid, carbon productivity, and racial and gender diversity. Companies engaging in activities such as thermal coal, blocking climate policy and deforestation are disqualified.

Boosting its position from 28th place last year, CDL improved its performance on energy, greenhouse gas and water productivity, ESG-linked remuneration for management, talent attraction and retention, and a sustainable supply chain.

Developer CDL was ranked 22nd in the list, one of only four real estate companies in the top 100. It was followed by shopping centre giant Unibail-Rodamco-Westfield in 70th place, industrial specialist Prologis in 87th place and Hong Kong developer Sino Land in 99th.

Pictured above, Lumina Grand will be CDL's second BCA Green Mark Platinum (Super Low Energy) building in Singapore.

General Atlantic has agreed to acquire sustainable infrastructure and real estate manager Actis.

The New York-based growth investor’s acquisition will create a firm with $96 billion of assets under management, $12.5 billion contributed by Actis. The UK-based firm will become the sustainable infrastructure arm within General Atlantic’s global investment platform.

Actis has 140 staff across 17 offices around the world. Its 24-strong real estate team is led by Hong Kong-based Brian Chinappi. Investments include data centres in Korea, industrial property in Vietnam and affordable housing in India.

Real estate investors in Asia Pacific are looking for ESG retrofit projects, to develop new green buildings and to create on-site renewable energy, a CBRE survey found.

The broker’s APAC 2024 Investor Intentions Survey found just over 60% of investors, the bulk of which are private equity funds, plan to retrofit existing assets to make them ESG compliant. 

More than half the respondents intend to develop or buy green buildings this year and 40% said they plan to enable on-site energy generation. 

The survey also found investors to be slightly more willing to pay a ‘green premium’ with only 27% refusing to pay extra for a more sustainable asset, down from 30% in 2023. More than 40% said they were prepared to pay a premium of up to 5%, while a quarter would pay 6-10%.

Proptech venture capital firm Pi Labs has opened in Hong Kong and appointed Akina Ho to lead its Asia business.

Ho was co-founder of the Hong Kong Proptech Alliance, where she is an adviser, as well as an adjunct professor at Hong Kong University of Science & Technology. She was previously head of digital transformation and innovation at listed real estate company Great Eagle Holdings.

Pi Labs said its new presence in Asia had been driven by its increasingly global investor network and their growing requirements for specialist proptech investment expertise in the region.

Ho said: “With Pi Labs’ expansion into Asia, it will allow investors to have access to deep tech startups that help to digitalise and decarbonise the built world.  As proptech in Asia is moving seriously towards a more ESG-focused strategic direction, it is perfect timing for Pi Labs to enter Asia.”

Pi Labs founder Faisal Butt said: “Hong Kong is a key gateway to Asia and benefits from progressive real estate developers already taking bold steps to deploy the latest technology into the built world. We already have partners in Hong Kong including household names such as Swire Properties and continue to have meaningful discussions with world-class capital partners who are searching for the connectivity, deep industry knowledge, and investment expertise we have in built environment technology.”

Asian office occupiers demanding green buildings but are unwilling to pay a premium for them, a new survey from CBRE found.

The broker’s 2023 Asia Pacific Office Occupier Sentiment Survey, which questioned 130 corporate real estate executives in 80 companies, found that 64% of office occupiers want to increase their use of ESG-certified buildings. 

However, only 23% were prepared to pay a premium for environmentally sustainable space and, of these, only 10% were prepared to pay a premium of more than 10%. Nearly two-thirds said they would not pay more than 5%.

CBRE suggests the result is partially because so many Grade A offices in the region are already green certified, 43% in 2022. This means green certification is already becoming the norm for Grade A offices in some markets. 

Consequently, the “green premium” is much stronger in markets where the stock of green certified buildings is lower. For example a rental premium of 15-25% might be achieved in Shenzhen or Guangzhou, says CBRE. In leading markets for green certification, such as Singapore and Australia, the premium might only be 2-8%.

The report suggests that a “brown discount” for non-certified buildings will become more apparent as green certification becomes standard for Grade A office buildings.