OUE Commercial REIT (OUE C-REIT) has now established itself as one of the leading Singapore REITs in terms of the proportion of sustainability linked loans secured as a percentage of its total debt.
The REIT disclosed on 14 June that it has obtained another unsecured sustainability-linked loan, this time with a quantum of SGD430 million.
OCBC Bank is the sustainability coordinator for the transaction.
With the new facility in place, there are no further refinancing requirements until 2025 and the proportion of sustainability linked loans has now increased to 69.6% of OUE C-REIT's total borrowings as of 31 March 2023.
It is one of the highest percentages amongst Singapore REITs.
The weighted average term of debt as at 31 March 2023 will lengthen to 3.2 years from 2.7 years on a pro forma basis.
This is OUE C-REIT’s third sustainability linked loan and it incorporates interest rate reductions linked to predetermined sustainability performance targets.
These goals are in line with the REIT’s long-term targets to reduce energy and water intensities by 25% below 2017’s level by 2030.
This will allow OUE C-REIT to enjoy savings in interest costs when the targets are achieved, said the REIT.
OUE Commercial REIT was last done on the Singapore Exchange at SGD0.32, which presently implies a distribution yield of 6.63% according to data on the Singapore REITs table.