Frasers Property entity secures refinancing for $1.08 bil green loan

By Jovi Ho

/ The Edge Singapore |

August 22, 2023 7:48 PM SGT

A joint venture entity of Frasers Property Limited has drawn down a five-year green term loan club facility totalling $1.08 billion to refinance a loan for Frasers Tower due in September. Photo: Frasers Property Limited

A joint venture (JV) entity of Frasers Property Limited has drawn down a five-year green term loan club facility totalling $1.08 billion to refinance a loan for Frasers Tower due in September, the company announced on Aug 22.

Under the loan terms, Frasers Property enjoys a lower margin on its green loan if Frasers Tower maintains at least a Green Mark GoldPLUS certification status, issued by Singapore’s Building and Construction Authority (BCA). Frasers Tower has already been accorded the highest attainable Green Mark Platinum rating.

Participating banks include United Overseas Bank, DBS Bank, Industrial and Commercial Bank of China Limited (Singapore Branch), Oversea-Chinese Banking Corporation (OCBC), CIMB Bank Berhad (Singapore Branch), RHB Bank Berhad and ING Bank N.V. (Singapore Branch).

Frasers Tower is a 38-storey premium Grade-A office tower with an adjacent three-storey cascading retail podium. It is one of six office properties managed by Frasers Property Singapore.

Its environmentally-friendly design and resource-efficient features include the use of sustainable and recycled materials during construction, such as green cement and recycled concrete aggregates. Its double-glazed facade design reduces solar heat gain while its building systems optimise water and energy efficiency and improve indoor air quality, says Frasers Property.

Other green features that have been implemented at Frasers Tower include energy-efficient escalators and energy regenerative lifts, where heat generated by elevators during use is converted into reusable energy for the building.

A ductless fan system, which operates with low static pressure loss, helps to reduce overall power consumption. Motion sensor lighting controls are incorporated into common toilets, car parks, lift turnstile systems and staircases to maximise energy savings, says Frasers Property, while automated office perimeter lighting helps maximise daylight savings.

Loo Choo Leong, group CFO of Frasers Property, says: “Since successfully raising Singapore’s first syndicated green loan in 2018, Frasers Property has continued to deepen our commitment to sustainable financing. To date, the Group has secured more than $10 billion of green or sustainability-linked loans and bonds, attesting to our commitment to our decarbonisation journey.”

In February, Frasers Property announced that it had secured a five-year A$340 million ($295.69 million) and US$75 million ($101.64 million) syndicated sustainability-linked loan for its Australia business, Frasers Property AHL Limited (FPAHL).

See also: Frasers Centrepoint Trust secures $419 mil green loan from OCBC with carbon credits in tow

The sustainability-linked loan, which has a price reduction structure that adopts sustainability performance targets linked to the group’s goal to be a net-zero carbon corporation by 2050, was a first for Frasers Property. Its key feature is its price reduction structure that provides interest rate savings from the second year if FPAHL achieves a prescribed reduction in its annual absolute greenhouse gas emissions based on its FY2019 footprint.

Frasers Property, which is itself listed on the Singapore Exchange (SGX), has total assets of $40.1 billion as at March 31. It is also the sponsor of two S-REITs — Frasers Centrepoint Trust (FCT) and Frasers Logistics and Commercial Trust — and Frasers Hospitality Trust, a stapled trust.

In July, FCT announced that it had partnered with OCBC on Singapore’s first green financing solution that comprises a green loan and carbon credits.

Proceeds from the $419 million green loan will be used to refinance a maturing facility, said FCT, along with asset enhancement initiatives, decarbonisation projects like procuring energy-efficient technology for Tampines 1 shopping mall and other general corporate purposes.

As at 10.51am, shares in Frasers Property are trading 1 cent lower, or 1.26% down, at 80 cents.

This story first appeared on The Edge Singapore.

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