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Link REIT secures sustainability-linked loans
Interest savings on US$272.68 million loans linked to borrower’s sustainability performance
14 Jan 2021 | The Asset
Link's The Cabot
Link's The Cabot

Link Asset Management Limited (Link), the manager of Link Real Estate Investment Trust, has converted two five-year loans totalling 200 million pounds sterling (US$272.68 million) to sustainability-linked loans. This marks Link REIT’s first sustainability-linked loan denominated in pound sterling.

In August 2020, Link signed two loans in pound sterling separately with BNP Paribas and DBS Bank to partially finance its acquisition of The Cabot, Link’s first asset in the United Kingdom. The Cabot is a premium grade-A office property located in the Canary Wharf, London, and is rated as “very good” by BREEAM (Building Research Establishment Environmental Assessment Method) 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 incentivize sustainable practices.

Kok-Siong Ng, Link’s chief financial officer, says: “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.”

Link REIT is a constituent of the Hang Seng Corporate Sustainability Index, the Dow Jones Sustainability Asia Pacific Index and the FTSE4Good Index.