Lendlease REIT leads the market with bold sustainability benchmarks

Interest savings from the recently secured sustainability-linked loan will improve cashflow for its unitholders

  • 15 Mar 2022
  • by
  • Lendlease Author Better Places

A business that continuously raises the bar while being kind to the planet may seem like a rarity in the world of sustainability today. 

That elusive accolade might, however, seem befitting for Lendlease Global Commercial Trust Management Pte Ltd, which manages market darling Lendlease Global Commercial REIT (“LREIT”). 

LREIT has just clinched a S$860 million unsecured Sustainability-Linked Loan (“SLL”), the largest ever such facility granted to an S-REIT. 

The SLL bolsters LREIT's efforts in minimising its carbon footprint by pegging the interest rate on this loan to LREIT’s tangible improvements on predetermined sustainability performance targets. 

This mechanism allows LREIT to enjoy savings on borrowing costs as it achieves these targets through its portfolio in Singapore. 

The SLL will help LREIT realise a plethora of activities for corporate growth, including funding the acquisition of a 100% stake in Jem, an integrated office and retail development in the West of Singapore. 

The goal is to further propel LREIT’s sustainability ambitions, which it shares with its Sponsor, Lendlease. LREIT has committed to ensure that its entire portfolio, which is powered mostly by renewable energy and uses water and other finite resources judiciously, achieves minimal to zero greenhouse gas emissions. Lendlease's own Mission Zero targets, hailed as one of the boldest in the industry, has committed to attain net zero carbon emissions by 2025 and reach absolute zero carbon emissions across all its operations by 2040. 

LREIT’s sustainability performance targets are, in turn, aligned with the internationally adopted Science Based Targets initiative (SBTi), whose Business Ambition includes companies working to limit the world’s rising temperatures to a maximum of 1.5°C above pre-industrial levels. This target is one to which Lendlease has also committed to. 

“This injection of capital is a refl¬ection of our commitment to our decarbonisation roadmap that will deliver long-term sustainable growth and value for the built environment, our assets and stakeholders.”  Mr Kelvin Chow, Chief Executive Officer, Lendlease Global Commercial Trust Management

Mr Kelvin Chow, Chief Executive Officer, Lendlease Global Commercial Trust Management, noted the SLL adds weight to LREIT’s continuing leadership in sustainability, regionally as well as globally. As it is, for the second year running, LREIT was named the Regional Sector Leader in the Asia Retail (Overall) and Asia Retail (Listed) categories for the 2021 GRESB real estate assessment. With the highest GRESB assessment score, LREIT beat 101 of its peers in the Asia (Listed) category, which cuts across all real estate sectors in Asia and scored an "A" for Public Disclosure.

LREIT rounded 2021 off with a feather in its cap as GRESB conferred it second place in its Global Retail (Listed) category. 

Powering sustainability digitally 

The race is on towards Mission Zero and these commitments are accelerating Lendlease's digital ambitions. By incorporating digital throughout the complete life cycle of new developments, sustainability can be in-built from the very start, from design through to the construction, operations and management. Lendlease's very own end-to-end digital platform - Podium - embodies this vision, with its suite of innovative products that reinvent how it approaches building better while complementing its sustainability ambitions. In the words of Ms Ng Hsueh Ling, an industry veteran who is Managing Director, Singapore and Chairman, Lendlease Global Commercial Trust Management, “We are at the beginning of a long-term commitment to transforming the built environment and continuously innovating to build better for a sustainable planet.”

“Beyond just reducing emissions, we have also made headway in developing our digital capabilities, which will transform how we design, build and operate. As we continue to embrace the world of autonomous buildings, we are con dent that we will create places that last, through our placemaking expertise, with the safety and wellness of the people in mind. This is the future.”  Ms Ng Hsueh Ling, Managing Director, Singapore and Chairman, Lendlease Global Commercial Trust Management

Lendlease has set ambitious science-based emissions reduction targets, in line with the Science-Based Targets Initiative's (SBTi) Business Ambition to limit the world's rising temperatures to a maximum of 1.5°C above the record for pre-industrial temperatures.


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 What we are doing

Reduce waste 

  • Increase recycling rates through the use of our in-mall food waste eco-digester at Jem, thereby diverting waste from landfill 
  • Reward tenants that support sustainability through Green Lease scheme at 313@somerset 
  • Made 313@somerset an e-waste disposal location 

Reduce energy and emissions 

  • Implement energy efficiency improvement initiatives 
  • Increase the use of renewable energy to 100% by 2030 
  • Trial alternative fuels and phase out fossil fuels for backup generators in assets 
  • Utilise energy efficient lights and atrium daylighting at 313@somerset to save energy 

Reduce water usage 

  • Conserve water at 313@somerset and Jem through NEWater utilisation, rainwater harvesting and introduction of water-efficient tap fittings (with 3-ticks WELS) 
  • Adopt innovative and efficient solutions, engage stakeholders and educate them on water conservation 

Create social value 

  • Serve as Business Champion for Lendlease Foundation sponsored social enterprise Project Dignity and support various social and charitable activities 

Read the full story here.

Source: The Straits Times © SPH Media Limited. Permission granted by City Life Advertising Pte Ltd for reproduction.