SINGAPORE, 5 November 2021 – ARA Asset Management Limited (ARA or the Group) is pleased to announce that it has secured a US$1 billion sustainability-linked loan, one of the largest to be inked in Singapore for a real assets manager, demonstrating its strong commitment towards ESG and sustainable financing. As a leading real assets manager in Asia Pacific, ARA’s portfolio of REITs and private funds have been early movers on the sustainable financing front, securing over US$1.3 billion over the past two years. Including this US$1 billion sustainability-linked loan, the Group’s total sustainability-linked loans and green financing now exceed US$2.3 billion.
The loan was secured with six leading Asian and international banks, namely DBS Bank Ltd (DBS), Oversea-Chinese Banking Corporation Limited (OCBC), Sumitomo Mitsui Banking Corporation (SMBC) Singapore, Malayan Banking Berhad, Singapore Branch, The Bank of East Asia, Limited, Singapore Branch and Crédit Agricole CIB. DBS, OCBC and SMBC acted as Sustainability Advisors for the loan, with DBS as the Facility Agent.
The five-year unsecured committed loan facility includes a pricing mechanism that is designed to incentivise the Group in achieving sustainability targets through the REITs and funds that it manages. Its sustainability performance will be verified independently and disclosed in the ARA Sustainability Report annually. Structured as a dual currency USD-SGD facility, the loan facility is pegged to the Singapore Overnight Rate Average (SORA) and the USD Secured Overnight Financing Rate (SOFR). It is the largest to be pegged to SORA, marking a significant milestone in Singapore’s adoption of SORA as the new interest rate benchmark for the Singapore Dollar cash and derivatives markets.
The loan proceeds will be used to fund the Group’s refinancing of existing borrowings, working capital or general corporate funding purposes. The loan drawdown is subject to the satisfaction of customary conditions precedent, including but not limited to, the completion of the proposed business combination of ESR Cayman Limited and ARA.
ARA Group CEO, Mr Moses Song, said: “Sustainability is a core business tenet of ARA, which includes active monitoring, assessment and continuous improvement. During the year, we advanced on our ESG efforts with our twin pledges to the World Green Building Council’s Net Zero Carbon Buildings Commitment and United Nations-supported Principles of Responsible Investment, as well as attained outstanding results in the 2021 GRESB Assessment. The successful close of ARA’s inaugural sustainability-linked loan marks an important milestone in the Group’s five-year ESG Roadmap towards creating a sustainable and carbon neutral real assets management business, while supporting the development of sustainable capital markets to fuel the future growth of the real estate industry.”
ARA is deeply committed to incorporating sustainability in its business and operations. As part of its holistic approach towards responsible investing, over 60 of its assets have been awarded green building certifications, where one in every 3 of its properties is a green building. In recognition of its strong commitment to sustainability, the Group has garnered more than 120 ESG awards over the years.
As ARA invests for the future, the Group will strive to address the environmental, social and governance issues facing the world today as a responsible and impactful manager.
Mr Chew Chong Lim, Managing Director & Group Head of Real Estate, Institutional Banking, DBS, said: “We are pleased to support ARA in closing its maiden sustainability-linked loan and opening a new chapter in ARA’s sustainability journey. With the loan being one of the largest on record for Singapore’s real estate sector this year, we are also marking a significant milestone in Singapore’s ambition to be a regional and global hub for sustainable and green finance. We remain committed to partnering forward-thinking companies such as ARA in realising their ESG plans as we build a lower carbon future together.”
Ms Elaine Lam, Head of Global Corporate Banking, OCBC Bank, said: “OCBC is proud to work with ARA as a Sustainability Advisor on this landmark Sustainability-Linked Loan, one of the largest in Singapore’s real estate sector to date. As like-minded partners on this journey of sustainability, we support ARA in their commitment to incorporate sustainable practices in their operations and to eventually achieve net zero carbon emissions by 2050. Combating climate change requires all of us to take action to progressively decarbonise, and ARA’s 5-year ESG Roadmap is a mark of industry leadership.”
Mr Yoshiaki Kageyama, Managing Executive Officer and Co-Head of Asia Pacific at SMBC, said: “We welcome the opportunity to support ARA’s impressive momentum in addressing environmental impact in the real estate sector. The transaction aligns strongly with SMBC’s sustainability journey, and particularly with the Group’s stated mission towards achieving carbon neutrality on a portfolio basis by 2050. We continue to actively engage and work with our customers towards more sustainable business models to contribute to the global transformation towards a better society.”
ARA’s latest sustainability report is available at https://www.ara-group.com/homepage/sustainability/.
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