LINK Asset Management Limited, the manager of Link Real Estate Investment Trust (Link REIT), and OCBC Bank announced June 11 that The Link Finance Limited, a wholly owned special purpose vehicle of Link REIT, has signed a five-year sustainability-linked loan of HK$1 billion from OCBC Bank. This marks Link REIT’s first sustainability-linked loan transaction in Hong Kong dollar.
To incentivise Link REIT’s sustainability performance, OCBC Bank will offer reductions in the interest rate on a tiered basis subject to Link’s environmental, social and governance (ESG) performance.
Link REIT’s ESG performance will be measured by its continued inclusion in leading global sustainability indices as well as improvements in its Global Real Estate Sustainability Benchmark (GRESB) score. GRESB is widely recognized to be the leading sustainability benchmark for real estate and infrastructure investments across the world.
Proceeds of the loan will be used for general working capital and corporate funding purposes.
This sustainability-linked loan also continues OCBC Bank’s momentum in the sustainable finance space. The bank ranked first for Bloomberg’s 2019 Mandated Lead Arranger (MLA) league table for green loans and renewable energy loans, as well as the 2019 MLA league table for green loans and sustainability-linked loans by intelligence service Debtwire.
Link REIT’s maiden sustainability-linked loan signed in March was in Australian dollar and for general corporate funding purposes including sustainability initiatives.