SINGAPORE'S first and largest listed business space and industrial real estate investment trust, Ascendas Reit, on August 17 priced its inaugural green bond amounting to S$100 million (US$73 million) – its first issued under a newly-established green finance framework. 

The 10-year offering pays a fixed coupon rate of 2.65% and garnered an order book in excess of S$650 million from 47 accounts. By type of investors, asset managers, insurance companies and hedge funds accounted for the bulk of the bonds with 80%, followed by banks and corporates 11%, and private banks 9%. OCBC Bank was the sole lead manager, bookrunner and green finance adviser for the transaction.

William Tay, CEO and executive director of Ascendas Reit manager Ascendas Funds Management, says the launch of Ascendas Reit’s green finance framework reinforces its commitment towards the sustainability strategy to improve the environmental performance of its portfolio.

“The proceeds from our green bonds or loans will allow us to finance green projects that mitigate climate change by reducing greenhouse gas emissions, improving energy efficiency, reducing water consumption or having other positive environmental impact,” he adds. “This is also in alignment with our support of the UN Sustainable Development Goals.”

The net proceeds from the transaction will be used entirely to refinance 17 green properties from Ascendas Reit’s portfolio, which has been selected based on the eligibility criteria in its green finance framework. These properties have a minimum green rating of BCA (Building and Construction Authority) green mark gold. Ascendas Reit owns a total of 34 properties in its Singapore portfolio with BCA green mark certifications, the largest number among Singapore Reits, and will continue its support of the green mark scheme.

Ascendas Funds Management continues to step up its efforts to minimize Ascendas Reit’s environmental footprint. In Singapore, its portfolio currently has the largest combined solar farm by a real estate company comprising 21,000 solar panels across six properties that can generate over 10,000MW-hours of solar energy annually.

To encourage a wider adoption of electric vehicles, Ascendas Reit’s portfolio also provides the largest number of public high-speed electric vehicle charging points by a Singapore Reit – with 40 charging points across eight properties.

Ascendas Reit’s green finance framework is prepared in line with the Green Bond Principles 2018 by the International Capital Market Association and the Green Loan Principles 2020 by the Loan Market Association, Asia-Pacific Loan Market Association, and Loan Syndications and Trading Association.

The framework guides Ascendas Reit in the allocation and management of the proceeds raised from its first green bond, as well as future green financing transactions. Ernst & Young has performed an independent limited assurance to confirm that the framework has been prepared in accordance with the green bond and green loan principles.

The green bonds were drawn under Ascendas Reit’s S$7 billion euro medium-term note securities programme, which OCBC Bank also acted as arranger and dealer.