Lendlease completes £250m UK green bond
In a sign of growing demand for sustainable finance Australian developer Lendlease has raised £250m in its first UK green bond.
The 12-year fixed-rate bond, which pays a coupon of 3.5%, will go towards the developer’s $114bn development pipeline.
Lendlease assets eligible for green financing include the £2.4bn International Quarter London development in Stratford, where the company used sustainable glue laminated timber in the construction of the central Pavilion building.
This year, Lendlease has also raised AU$800m across two other green bonds and completed $1.5bn of sustainability linked loans.
The developer said that more than 50% of its financing facilities are now linked to green, social and sustainability criteria.
Rise of green real estate lending
Lendlease’s green bonds come at a time when real estate developers around the world are ramping up their use of sustainability-linked financing.
Earlier this year, French investor Gecina converted all of its outstanding debt (€5.6bn) into green bonds.
These credit facilities offer borrowers favourable margins in return for delivering projects that meet certain criteria defined in the terms of the loan.
For some issuers, green bonds are a way of aligning their debt investors’ interests with the interests of their shareholders, many of whom are increasingly demanding sustainable development.
Meanwhile, lenders such as ICG have issued green loans in order to incentivise borrowers to go further in delivering ESG targets than they otherwise would.
Simon Dixon, chief financial officer at Lendlease, said: “We believe that creating places where communities thrive goes hand in glove with delivering positive environmental and social outcomes while also creating value for our securityholders.
“Despite continuing market volatility in the context of emerging COVID-19 variants, the bond attracted solid interest from investors seeking to support sustainable opportunities.”