THE national joint venture between Malaysia and Singapore, M+S Pte Ltd, on Monday announced that it has obtained a S$1.95 billion green loan for the integrated development Marina One from DBS, OCBC Bank and United Overseas Bank (UOB).
The landmark deal, the largest green loan for a real estate company in the Asia-Pacific to date, is set to bolster Singapore’s reputation in sustainable financing, said Elaine Lam, OCBC Bank’s head of global corporate banking.
Data compiled by Refinitiv, which on Monday published its H1 2020 global report on sustainable finance and advisory activity, showed that green loans doled out to the real estate sector in Singapore totalled almost US$2.1 billion in the first six months of this year.
DBS Bank’s managing director and head of government-linked corporations, Ang Teck Wee, told The Business Times (BT) that the development of the Republic’s sustainable financing scene continues to make steady headway, driven by supportive policies from regulators and customers’ broader acceptance of green financial instruments.
He said: “As a testament to the growing traction, DBS concluded 35 sustainable-financing transactions amounting to around S$5 billion in 2019, an increase of about 60 per cent from the year before.”
He added that he hopes the M+S green loan will inspire and challenge more companies to incorporate sustainability into their corporate strategies.
Likewise, OCBC noted that Singapore has been developing its capabilities as a regional sustainable finance hub, and businesses across Asia are increasingly looking to tap this expertise. Last month, OCBC set a new target of S$25 billion by 2025 for its sustainable finance portfolio, having surpassed its original S$10 billion target in the first quarter of 2020.
UOB head of corporate banking Singapore, Leong Yung Chee, told BT: “We’e seeing more real estate companies tap sustainable financing.
“This latest green loan reflects the (real estate) sector’s increased push for sustainability, and demonstrates Singapore’s ability to facilitate large transactions in support of sustainable development in the region.”
As at the end of 2019, UOB had extended more than S$6 billion in sustainable financing, including green loans, sustainability-linked loans and loans for green-certified buildings.
M+S on Monday said that the proceeds of its green loan will partially finance Marina One’s office and retail components, which are valued at about S$5 billion.
The developer is a 60:40 joint venture between Malaysian sovereign wealth fund Khazanah Nasional and Singapore investment firm Temasek Holdings.
The Marina One East and West Towers have nearly 1.9 million square feet (sq ft) of Grade A office space, housing industry leaders and multi-national corporations such as Facebook, PwC, Mitsubishi UFJ Financial Group, Julius Baer, Netflix, Rajah and Tann, and Prudential. The retail podium spans more than 140,000 sq ft across four floors.
The residential component, comprising two towers, is not part of the green loan package.
The trio of Singapore lenders acted as joint green-loan advisers and mandated lead arrangers.
Kemmy Tan, chief executive officer of M+S, said Marina One is “living proof that commercial real estate can, and should, embrace the principles of sustainability without compromising on design and quality”.
Every facet of its architecture creates environmental benefits. For instance, the orientation of the building and the louvres on its facade provide each level with direct shade from the sun to reduce heat and cooling needs. Innovative technologies are also used to conserve energy and boost efficiency, such as the recycling of heat and power, rain water harvesting and solar glazing.
DBS’ Mr Ang told BT that to drive further progress in Singapore’s sustainable financing scene, he advocates the scaling up of transition finance and supporting of clients to adopt green solutions, to broaden and deepen the market.
“Leapfrogging technological advances is great, but taking first steps is sometimes essential to effect change,” he said.