CapitaLand obtains $500 million sustainability-linked bilateral loan from UOB

The loan is regarded to be the largest sustainability-linked bilateral loan in the real estate sector of Singapore. Photo: CapitaLand

CapitaLand has secured a $500 million sustainability-linked loan from United Overseas Bank (UOB). The loan is regarded to be the largest sustainability-linked bilateral loan in the real estate sector of Singapore.

The four-year $500 million sustainability-linked loan from UOB represents CapitaLand’s fifth sustainability-linked loan, which is said to be explicitly linked to CapitaLand’s success 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.

It can be recalled that CapitaLand placed first across four categories and led the Global ‘Diversified – Listed’ category with the highest tier rating of five stars in GRESB 2019.

“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,” said Andrew Lim, Group Chief Financial Officer of CapitaLand Group.

As a matter of fact, CapitaLand and its real estate investment trust already acquired a total of over $2.42 billion in less than two years, through sustainable financing instruments, reinforcing the group’s commitment towards responsible growth. To date, CapitaLand has partnered with seven financial institutions to secure a total of 12 sustainable financing instruments consisting of sustainability-linked loans, green loans and green bond.

Unlike green loans, CapitaLand enjoys more flexibility in using the sustainability-linked loan proceeds for general corporate purposes because it is tied to the ESG performance of CapitaLand as a group and not with any specific project or property.

CapitaLand will also generate interest savings as it maintains or improves its rating on the benchmark, as it did previously when it achieved a total of $600 million worth of interest savings on its existing sustainability-linked loans with Credit Agricole Corporate & Investment Bank, DBS, Natixis Bank and Société Générale.

“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 $1.5 billion in 2020 through sustainable finance. It is testament to the trust that our financial partners have in CapitaLand,” added Lim.

Aside from the group’s success in sustainability-linked loans, CapitaLand also reported a total of $208 million worth of utilities cost avoidance in 2019 since 2009.

In 2019 alone, the group’s energy and water consumption intensities were notably reduced by 19.2% and 22.4% respectively from the base year of 2008, while its carbon emissions intensity recorded a 29.4% reduction since 2008.

“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,” explained CapitaLand Group Chief Executive Officer Lee Chee Koon.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg