QIC raises world first retail property Green Bond
(9 August 2019 - Australia) QIC has issued a A$300 million green bond for its unlisted local malls fund arranged by CBA and NAB.
The issuance was five times over-subscribed by institutional investors domestically and in Asia with a coupon rate of two percent.
The bond was certified by the Climate Bonds Initiative and reportedly is a world-first for retail property for the QIC Shopping Centre Fund which has a A$15 billion portfolio. The issuance is rated green because the proceeds are allocated to a select pool of assets within the fund across Victoria and Queensland where QIC is releasing a series of initiatives to improve sustainability. The measures are expected to reduce greenhouse gas emissions intensity over the term of the bond by over 35 percent and include plant and equipment (P&E) upgrades, LED lighting and optimisation of the building management system.
Market appetite for green bonds is expanding quickly evidenced by the Clean Energy Finance Corporation (CEFC) A$30 million investment in the QSCF bond, Woolworths A$400 million five-year instrument first green bond issue and Monash University’s A$218 million raising from US capital markets after issuing a 'climate bond' that was certified by EY.
“Issuing a green bond is an important milestone for QSCF and the retail property sector globally and is an endorsement of QIC GRE’s progress and ongoing focus on sustainability," said QIC Global Real Estate MD Michael O'Brien.
“This transaction has created a new way for commercial property owners such as QIC to diversify funding sources and drive improvements in environmental sustainability of their buildings. The QIC bond was the seventh green or sustainable bond the bank has brought to market so far in 2019, and its 25th green, social and sustainability bond to date” said David Gall, NAB's Chief Customer Officer for C&IB.