ARA LOGOS Logistics Trust's Changi Districentre 2. (Photo: REITsWeek)

ARA LOGOS Logistics Trust (ALOG) has entered into its first SGD80 million sustainability-linked interest rate swap (IRS) with HSBC Singapore.

The IRS will be utilised to hedge the interest rate risk of ALOG’s borrowings.

Its economic terms are directly linked to two specific green targets, and these are namely a progressive reduction of carbon emission at the REIT’s multi-tenanted buildings, and increased usage of renewable energy.

“With sustainability integrated as part of ALOG’s long-term business strategy, green financing complements our ongoing efforts to proactively manage the environmental impacts of our business”, said Karen Lee, CEO of the REIT’s manager.

“We are committed to strengthen our green funding sources by collaborating with like-minded business partners such as HSBC, who share a collective commitment with us to work towards building a greener future”, she added.

ALOG was last done on the Singapore Exchange at SGD0.87, which presently implies a distribution yield of 6.03% according to data compiled on the Singapore REITs table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.