Link Asset Management Limited (Link), the manager of one of the largest real estate investment trusts in Asia, Link Real Estate Investment Trust, and DBS Bank (DBS), have announced that Link has signed a A$212m five-year sustainability-linked term loan with DBS. This marks Link’s first sustainability-linked loan, following its issuance of US$500m green bonds in 2016 and HK$4bn convertible green bonds in 2019.
To incentivise sustainable practices, DBS has structured the loan to incorporate a reduced pricing structure with interest cost savings. Link will be eligible for the interest savings if it maintains its listing on leading global sustainability indices and achieves sustainability milestones based on performance in the annual independently assessed Global Real Estate Sustainability Benchmark (GRESB). GRESB is a sustainability benchmark for real estate and infrastructure investments across the world.
The proceeds of the loan will be used for general corporate funding purposes including sustainability initiatives. Subsequent to the acquisition of 100 Market Street in Sydney, announced in December last year, Link is taking on the sustainability-linked loan in Australian dollar to match the currency of this investment.
“As we pursue our medium-term goals outlined in Vision 2025 and to create value for our stakeholders and the communities we serve, we are pleased to ensure the integration of sustainability best practices into our daily operations by introducing our very first sustainability-linked loan with our key relationship bank, DBS,” said George Hongchoy, Link’s chief executive officer.
“As Asia’s largest REIT [real estate investment trust], Link’s maiden sustainability-linked loan underscores the growing shift towards responsible financing in the region,” said Chew Chong Lim, managing director and global head of Real Estate, Institutional Banking at DBS. “We believe financing solutions with features that incentivise sustainable development enable corporates to generate long-term value while contributing to the United Nations Sustainable Development Goals. We look forward to forging more such collaborations as we collectively meet tomorrow’s sustainability challenges.”
Both Link and DBS are signatories to the United Nations Global Compact and are committed to driving progress towards the Sustainable Development Goals in ways that are meaningful for their respective businesses. For DBS, this includes acting on climate change by partnering corporates in adopting responsible financing practices. In 2019, DBS provided sustainable financing amounting to about SG$5bn.
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