CDL secures first property development green loans in Singapore

City Developments Limited is to use the bank-provided loans to fund new property developments that deliver benefits to comply with high environmental standards

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Singapore-listed real estate operating company City Developments Limited (CDL) has expanded its green financing streams from bonds to loans as it secures two green loans totalling S$500 million (US$367.65 million).

The transactions, announced on April 5, represent the first green loans designed to fund new property developments in Singapore. The two deals comprised a S$400 million three-year facility provided by DBS, which also acted as the deal adviser, and a S$100 million two-year loan granted by HSBC, which was the structuring adviser for the deal.

Proceeds from the green loans will be used to finance eligible green development projects as defined in the CDL green finance framework, which was developed to demonstrate how CDL and its group entities intend to fund projects that will deliver environmental benefits to support the group’s business strategy and vision.

The framework also stipulates how the proceeds are to be applied to eligible projects. The loans, meanwhile, likewise allow CDL to finance new green developments not just in Singapore, but also overseas.

CDL’s green loans follow the company’s inaugural green bond offering in 2017 – the first by a listed Singapore real estate company. That transaction raised S$100 million, which was allocated towards various initiatives to enhance energy and water efficiency at Republic Plaza, CDL’s flagship Grade A office building located in the heart of Singapore’s central business district.

CDL group CEO Sherman Kwek notes that green financing plays a pivotal role in channelling capital to build greener and more climate-friendly infrastructure.

“CDL’s inaugural green bond in 2017 and our new green loans have enabled us to tap on investors and banks that are supportive of our sustainability best practices,” he says. “With the global shift to a low-carbon economy, CDL will continue to explore sustainable financing to develop more green buildings that not only bring economic savings, but also benefit the occupants and the environment.”

As of December 2018, CDL has accumulated a total of 100 green mark developments and office interiors awarded by Singapore’s Building and Construction Authority (BCA) – the highest tally among private sector real estate companies in Singapore. CDL is also the first and only private sector developer to receive the BCA Built Environment Leadership Platinum Star Award.

Sustainalytics, a global provider of environmental, social and governance (ESG) ratings and research, provided an independent opinion on the CDL green finance framework’s environmental credentials and alignment to the Green Bond Principles 2018 and Green Loan Principles 2018.

In CDL’s integrated sustainability report 2019 released in March, Kwek highlighted that energy efficiency has been the company’s top priority in the way that it develops and manages its properties, noting that it achieved more than S$24 million in savings for eight commercial buildings from 2012 to 2018 through energy-efficient retrofitting.

CDL is also the first Singapore real estate company to set a reduction target of 59% for the intensity of its carbon emissions, as validated by Science Based Targets initiative. It likewise pioneered the adoption of renewable energy certificates procurement through a blockchain-enabled platform in Singapore.

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Date

9 Apr 2019

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