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In a bid to address pollution and congestion brought about by rapid urbanisation, more Asian property developers are turning to green loans, with the most recent being that by Frasers Property.
The Singapore-based developer raised a $1.2 billion green loan, which is the first of its kind by a Southeast Asian borrower under the Asia Pacific Loan Market Association’s (APLMA) principles that aim to standardise disclosure, reported Bloomberg.
The facility will refinance existing loans linked to energy efficient office development Frasers Tower, which features podium roof gardens and its own park.
Although critics of green finance have underscored the lack of universal standards, measures such as APLMA’s guidelines aim to raise transparency on the projects’ environmental impact as well as the use of proceeds.
“There are strong returns for banks to get into sectors like green buildings and renewable energy as they are showing very strong financial performance,” said Jonathan Drew, managing director, infrastructure and real estate group, global banking Asia-Pacific at HSBC Holdings Plc.
In August, Ho Bee Land inked a £200 million ($357 million) green bridge loan for its acquisition of London’s Ropemaker Place commercial building, while Hong Kong’s New World Development raised a HK$3.6 billion ($630 million) maiden green loan in March for a commercial re-development project.
“In Hong Kong, we increasingly see property firms that are developing green buildings based on the expectations of tenants, financiers and the community to develop projects that provide higher level of energy efficiency,” noted Drew, one of the lenders for the New World deal and green structuring adviser for the Ho Bee Land transaction.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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