QIC Global Real Estate has received investor demand amounting to A$1.5bn (€912m) for a A$300m green bond designed to help finance the upgrading of Australian shopping centres.
It has been described as the world’s first Climate Bonds-certified issued by a retail property owner.
QIC launched the green bond on behalf of its A$15bn QIC Shopping Centre Fund (QSCF) to fund sustainability initiatives.
“The QSCF green bond attracted new investors with green and ESG investment mandates from across Asia and Australia,” said Michael O’Brien, managing director of QIC Global Real Estate.
“Issuing a green bond is an important milestone for QSCF and the retail property sector globally, and is an endorsement of QIC GRE’s progress and ongoing focus on sustainability.”
O’Brien said the upgrades would include intelligent automation of plant and equipment, and installation of LED lighting.
As well as reducing the fund’s environmental footprint, sustainability programmes generated “strong commercial outcomes”, he added.
“That is why we have been on a pathway of environmental performance enhancement as we continue to evolve our assets into retail-led, mixed-use destinations.”
The Australian federal government agency, the Clean Energy Finance Corporation (CEFC), invested A$30m in the green bond to become a cornerstone investor.
“This green bond has been certified by the Climate Bonds Initiative under the Low Carbon Buildings – Property Upgrade sector criteria,” said CEFC debt market lead Richard Lovell.
CEFC has worked with QSCF since 2017 in setting sustainability targets to reduce energy costs and emissions and achieve a lighter load on the electricity grid.
In 2017, CEFC collaborated with QSCF via a A$200m senior debt facility that included a framework to undertake improvements in energy performance across QSCF’s portfolio.
Lovell said the market could expect to see new types of green bonds issued by Australian corporates as they sought to focus on sustainability and energy efficiency.