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Investec Property Fund launches first REIT sustainability-linked ESG bond in Africa

Posted On Thursday, 22 April 2021 23:02 Published by
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Investec Property Fund (‘IPF’ or ‘the Fund’) today became the first South African real estate investment trust (REIT) to issue a sustainability-linked bond.

Darryl_Mayers_CEO

The issuance of the note reflects the Fund’s direct commitment to environment, social and governance (ESG) principles.

The 3-year bond of R800 million, which was widely subscribed for, provides a unique opportunity to raise unsecured capital at a competitive coupon rate and to further unencumber the balance sheet. Furthermore, in line with the bond’s green credentials, the Fund will benefit from a reduction in the coupon of 10 basis points from its initial 190 basis points above 3-month JIBAR. This benefit will be realised when certain pre-agreed performance objectives, linked to the rollout of green building and renewable energy targets, are achieved by 30 June 2022.

Commenting on the listing, IPF joint-CEO, Darryl Mayers said: “We have always been committed to living in society, not off society. The decision to issue the first sustainability-linked ESG bond in the REIT sector, is not only a direct result of the strong appetite for IPF paper but is aligned and fully integrated with our ESG strategy. This issuance speaks to the underlying synergies within our assets and their alignment to the broader ESG priorities entrenched in the Fund. As a pioneer in the sector, we intend to hold ourselves accountable to our prescribed targets and play a leading role in working towards building a more sustainable society.”

The proceeds from the note will be used to refinance debt maturities and will have no impact on IPF’s loan to value ratio.

The Fund’s ESG strategy sets out to do no harm through responsible property management, optimise long term value creation, proactively minimise risk through ESG principles, and optimise systems without compromising service delivery. 

Standard Bank acted as sole arranger and sustainability agent.

Last modified on Thursday, 22 April 2021 23:07
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