WORLDWIDE: CapitaLand Ascott Trust has partnered with the International Finance Corporation to launch IFC’s a sustainability-linked bond.
It will be the first sustainability-linked bond for IFC in the hospitality sector globally, but not the first for CapitalLand Ascott Trust (CLAS), which issued its first sustainability-linked bond of S$200 million under its newly established Sustainability-Linked Finance Framework in April this year.
IFC, a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets, is the sole subscriber for the JPY16.5 billion (about S$157.4 million) sustainability-linked bond.
The seven-year bond, which will mature in November 2029, is being issued as part of CapitaLand Ascott Trust (CLAS) S$2 billion Multicurrency Debt Issuance Programme. It will have a fixed coupon rate of 1.05 per cent per annum and is paid semi-annually in arrears.
Proceeds from the bond will be used to refinance CLAS’ existing borrowings and to further decarbonise three of CLAS’ serviced residences in Southeast Asia.
The three properties are: Ascott Jakarta in Indonesia, Ascott Makati and Somerset Millennium Makati in the Philippines.
The three serviced residences are expected to achieve a 40.5 per cent reduction in electricity consumption by December 31, 2028. They must also obtain IFC’s Excellence in Design for Greater Efficiencies (EDGE) certification within the same timeframe.
The electricity consumption reduction target at the properties is aligned with the targets set out in the CapitaLand 2030 Sustainability Master Plan, which outlines the Group’s efforts towards a low-carbon business, improve water conservation and resilience, and enable a circular economy.
Serena Teo, chief executive officer of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management Pte. Ltd said: “We place sustainability at the core of everything we do. Dovetailing our financing efforts with our environmental, social and governance efforts further affirms our commitment towards responsible growth. To date, CLAS has raised about S$450 million through sustainable financing. CLAS continues to collaborate with like-minded stakeholders in the financing and investment community to fight climate change through our collective efforts. Currently, 35 per cent of CLAS’ portfolio is green-certified and we remain on track to green 50 per cent of our portfolio by 2025 and our entire portfolio by 2030.”
Kim-See Lim, IFC’s regional director for East Asia and the Pacific, said: “We are delighted to support CapitaLand Ascott Trust, Asia-Pacific’s largest lodging trust, in its efforts to help address the climate crisis in the region through IFC’s first sustainability-linked bond in the hospitality sector. Our investment will support the decarbonisation of a portfolio of energy-intensive buildings, while also ensuring that the energy reduction is specifically aligned with Net Zero targets.”
CapitaLand Ascott Trust has achieved several firsts as part of its global sustainability drive, further consolidating its reputation as a leader in sustainability in the hospitality sector. In April it issued its first sustainability-linked bond of S$200 million under its newly established Sustainability-Linked Finance Framework. And it became 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. The bond was well-received by investors and was about 2.2 times oversubscribed.
Last year Ascott Residence Trust (ART) was been recognised for its “outstanding leadership in sustainability” in the 2021 Global Real Estate Sustainability Benchmark (GRESB).
