SINGAPORE: Ascott Residence Trust (ART) has issued its first sustainability-linked bond of S$200 million under its newly established Sustainability-Linked Finance Framework.
ART is the first hospitality trust globally to issue a sustainability-linked bond. It is also the first listed real estate trust in Singapore to issue a sustainability-linked bond.
Sustainability-linked bonds are any type of bond where the financial and structural characteristics can vary depending on where the issuer achieves predefined sustainability goals. It is forward-looking and performance-based and issuers of sustainability-linked bonds can set key performance indicators, which are aligned with their sustainability strategies.
ART has committed to a sustainability performance target (SPT) of ‘greening’ 50 per cent of its total portfolio by end of 2025.
The properties must achieve a regional, national or internationally recognised green building standard or certification by a recognised third-party by the SPT observation date.
Beh Siew Kim, chief executive officer of Ascott Residence Trust Management Limited and Ascott Business Trust Management Pte. Ltd said: “Sustainability is core to everything we do at ART. Aligning our financing needs with our sustainability efforts to build a greener portfolio demonstrates ART’s focus on responsible growth. Our global sustainability strategy centres on improving energy efficiency through technology or engineering solutions, as well as increasing the use of renewable energy.”
The deal was met with strong demand from institutional investors and was about 2.2 times oversubscribed. The bond issue was eventually upsized from S$150 million to S$200 million, and the final order book closed at S$335 million with orders from across 47 accounts. 79 per cent of the bond was allocated to institutional accounts and 21 per cent to private banking accounts.
Beh Siew Kim added: “As of 31 December 2021, 33 per cent of ART’s portfolio is green-certified and we target to green the rest of our portfolio by 2030.”
Ascott Residence Trust (ART) was recognised for its “outstanding leadership in sustainability” in the 2021 Global Real Estate Sustainability Benchmark (GRESB).
