This article is from the Australian Property Journal archive
LOGISTICS platform ESR has secured a landmark five-year syndicated sustainability-linked term loan of US$2.5 billion with a one of the largest within the real estate space in Southeast Asia this year.
This loan features an interest rate reduction structure based on two key performance indicators including annual increases in ESR’s total solar power capacity, and ratings such as the minimum certification of Gold in LEED (Leadership in Energy and Environmental Design), and a rating of 5 stars in NABERS (National Australian Built Environment Rating System).
As ESR progressively increases its installed solar power capacity and improves the sustainability certifications and ratings of its assets, the interest rate will be reduced based on the prespecified performance targets, enabling the group to achieve lower borrowing costs.
Ivan Lim, ESR Group chief financial officer said against a backdrop of sector headwinds and market volatility, the loan is well supported by a core, yet diverse, group of lenders with deep knowledge of the real estate sector.
“Liquidity garnered from the market bears testament to our market leadership and our capability in securing competitively priced financing from the syndicated loan market. It also reflects our unwavering commitment to ESG. As part of our ESG 2030 Roadmap targets under the Property Portfolio pillar, we aim to set up 1,000 MW of solar power capacity on the rooftop of our assets and attain sustainable building certifications and ratings for 50% of the Group’s portfolio. This SLL will support ESR as we align ambitious sustainability goals with financial outcomes.” Lim said.
ESR’s latest loan was led and arranged by the HSBC, Mizuho Bank, MUFG Bank, Oversea-Chinese Banking Corporation, United Overseas Bank, and CIMB Bank.
Moody’s Investors Service was appointed to provide a second-party opinion on the KPIs and Sustainability Performance Targets.
