Frasers Property Australia has established its first Sustainable Finance Framework, defining an entire portfolio of sustainable assets and designed to support sustainability-linked bonds and loans.
Anthony Boyd, chief financial officer, Frasers Property Australia
The announcement of the framework comes as Frasers Property AHL limited, a subsidiary of Frasers Property Australia, announces a $2 billion multicurrency debt issuance program that can be used in conjunction with the framework to fund new sustainable developments and upgrades to the existing portfolio.
The framework provides overarching criteria and guideline, using the Global Real Estate Sustainability Benchmark (GRESB) ratings. It will guide Frasers Property Australia in how it enters “multiple sustainable finance transactions including, but not limited to “green or sustainability bonds and loans as well as sustainability-linked bonds and loans.”
“Sustainability is inherently embedded into our overall business strategy,” said Anthony Boyd, chief financial officer, Frasers Property Australia. “For a number of years, we’ve been using the GRESB rating for our portfolio, and obviously that’s not in and of itself a goal, but we have been looking at how we establish sustainable developments, so all of these things fit inherently into our business strategy. Part of this is how we fund our business, and part of this is how we maximise the sustainability impact.”
Frasers Property Australia aims to achieve a 5-Star rating for its new developments and at least a 4-Star rating for its existing portfolio based on the GRESB. In addition, Frasers Property Australia plans to be carbon neutral in development and operation by 2028.
Frasers Property Australia has already utilised green financing, establishing its first green loan in 2018. In 2019, Frasers raised $650 million loan facility, comprising a $500 green loan and a $250 million term loan, raised by its subsidiary, Frasers Property Treasury Pte Ltd.
The decision to develop a whole of business framework for addressing green development and green finance is part of the company’s business strategy, Boyd said.
“We’ve raised a number of loans that in this space,” he said. “This is unique in that it’s basically a whole of platform financing facility, or framework. That allows us to fund our entire business. As you’d well know, the green finance relates specifically to a project or a building. But now, the beauty of the framework is that it is across the entire portfolio, which means that we can fund some investment property that has a GRESB/Green star rating, and funding development activities that are pegged to a 5-star rating. It is a natural extension to what we do. We’re not changing anything, but leveraging the strength of our sustainability focus.”
Deloitte Touche Tohmatsu performed a reasonable assurance engagement in accordance with ASAE 3000 and has confirmed that the Framework has been properly prepared, in all material respects, in accordance with the relevant international principles and guidelines.
Australia and New Zealand Banking Group Limited, Barclays Bank PLC and Oversea-Chinese Banking Corporation (OCBC) Limited acted as joint sustainability coordinators for the setting up of the framework, Frasers said.
“We’ve been able to use the existing financing relationships ANZ locally and Barclays and OCBC in Singapore to coordinate this,” Boyd said. “The property business and the financing business is evolving at the same time, and the framework we’re creating is essentially fitting into the reporting criteria as they need it.”
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