Link REIT Secures Its First Sterling-Denominated Sustainability-Linked Loans
January 15, 2021 – Link Real Estate Investment Trust announced that it has converted two five-year loans totalling £200 million (US$273.6 million) signed with BNP Paribas and DBS Bank (DBS) respectively in August last year to sustainability-linked loans.
This marks Link REIT’s first sustainability-linked loan denominated in the Pound Sterling.
In August last year, Link signed two loans in Pound Sterling separately with BNP Paribas and DBS to partially finance its acquisition of The Cabot, Link’s first asset in the UK. The Cabot is a premium grade A office property located in the Canary Wharf, London and is rated as “Very Good” by BREEAM UK. The proceeds of the loan will be used for general corporate funding purposes including sustainability initiatives.
With the conversion of the loans to sustainability-linked loans, reductions in the interest rate will be offered to Link on a tiered basis subject to its performance in achieving sustainability milestones in order to incentivise sustainable practices.
Kok-Siong Ng, Link’s Chief Financial Officer, said, “The acquisition of The Cabot is part of our Vision 2025 growth strategy to diversify and improve portfolio mix. BNP Paribas and DBS have extended solid support in funding our pilot investment in the UK. The introduction of sustainability terms to the loans matches with Link’s Business as Mutual ethos and focus to enhance performance in Environmental, Social and Governance (ESG), helping us create long term values for our various stakeholders and communities.”
Hugo Leung, CEO of BNP Paribas, Hong Kong said: “As Europe’s leading bank, BNP Paribas is pleased to be involved in the financing of Link’s first investment in the UK. This is our first sustainability-linked loan facility with Link REIT, which will help to advance it sustainability agenda. We look forward to working closely with Link REIT to continue to support its efforts in ESG, and to evolve its businesses in the global transition to a low-carbon economy.”
Chew Chong Lim, Managing Director & Global Head of Real Estate, Institutional Banking, DBS, said, “DBS is delighted to walk alongside Link as it achieves yet another milestone in its sustainability journey. Having partnered Link for its maiden sustainability-linked loan in March 2020, DBS is delighted to now be part of Link’s first sterling-denominated sustainability-linked loan. We believe such deals will encourage even more companies in the real estate sector to explore financing solutions that incentivise sustainable development. We look forward to collaborating with more companies to drive the adoption of responsible financing practices for a more sustainable future.”
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