Central Walk, which has been acquired by Link REIT for RMB6.6 billion. (Photo: Google Maps)

Link REIT has obtained a five-year sustainability-linked loan of HKD1 billion (USD130 million) from OCBC Bank with potential reductions in interest rate.

OCBC Bank will offer reductions in the interest rate on a tiered basis subject to Link REIT’s environmental, social and governance (ESG) performance.

The facility is Link REIT’s first sustainability-linked loan transaction in HKD.

Proceeds of the loan will be used by the REIT for general working capital and corporate funding purposes.

Link REIT’s maiden sustainability-linked loan signed in March this year was in AUD, and proceeds for that were deployed for general corporate funding purposes, including sustainability initiatives.

Related: Link REIT secures AUD212 million sustainability-linked loan with DBS

Link REIT’s ESG performance will be measured by its continued inclusion in leading global sustainability indices as well as improvements in its Global Real Estate Sustainability Benchmark (GRESB) score.

GRESB is widely recognised to be the leading sustainability benchmark for real estate and infrastructure investments across the world.

“Green financing as part of our capital management strategy is an integral part of our vision, and this sustainability-linked loan shows our continued commitment to achieving growth in a sustainable and responsible manner”, said Kok-Siong Ng, Link REIT’s Chief Financial Officer.

“At OCBC, we, too, believe that businesses can do well by doing good, so we are proud to support Link REIT’s green financing endeavours, which will go a long way towards mitigating the impact of climate change”, said Tan Wing Ming, Regional General Manager for North East Asia of OCBC Bank.

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

Link REIT is also a signatory to the United Nations Global Compact.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.