Investec Property Fund launches first REIT sustainability-linked ESG bond in Africa
Integrating ESG towards building a more sustainable society.
Investec Property Fund (‘IPF’ or ‘the Fund’) today became the first South African real estate investment trust (REIT) to issue a sustainability-linked bond. 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 preagreed 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.
About Investec Property Fund
Investec Property Fund Limited is a South African-domiciled Real Estate Investment Trust, having listed on the JSE Limited (“JSE”) in 2011 and obtaining REIT status on 1 April 2013. The investment portfolio currently comprises direct and indirect real estate investments in South Africa and Europe. The direct investments comprise 90 properties in South Africa with a total gross lettable area (‘GLA’) of approximately 1 million m². The Fund’s local investment portfolio also includes a 35% interest in Izandla Property Fund Proprietary Limited (‘Izandla’). The Fund’s offshore portfolio comprises a 65% interest into a Pan-European logistics portfolio and a 25% interest into a Pan-European light industrial portfolio, which provides the Fund with geographic and earnings diversification and exposure to quality real estate in developed markets.
The objective of the Fund is to optimise capital and income returns over time for shareholders by investing in best of breed income-producing properties in the office, industrial and retail sectors in South Africa and in big-box logistics properties in Western Europe. Effectively, all rental income, less operating costs and interest © BRUNSWICK GROUP 2021 | CONFIDENTIAL | 2 on debt, is distributed to shareholders semi-annually. For more about Investec Property Fund please visit: www.investecpropertyfund.com
Media release issued by:
Brunswick South Africa on behalf of Investec Property Fund
Media enquiries:
Sasha Reddy Brunswick
Tel: +27 (0) 66 307 4714
E-mail: sreddy@brunswick.co.za
For further information, please contact:
Cheryl Leicher
Investec Property
Tel: +27 (0) 83 675 4241
E-mail: Cheryl.Leicher@investec.co.za
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