European logistics real estate investor Tritax EuroBox’s recent maiden €500 mln green bond issuance slashed its cost of debt and was over 6x oversubscribed, securing the lowest coupon ever for a BBB-debut real estate issuer in Euros.
The UK-listed logistics investor tapped into huge demand for sustainable investments, combined with exposure to the EU’s fast expanding and supply-constrained logistics warehouse market, driven by the e-commerce boom. The bonds also vaulted into the EU’s ‘dark green’ SFDR Article 9 category of impact investments.
Nick Preston, fund manager at Tritax EuroBox, said: ‘We were confident that we would meet our financing targets with Tritax EuroBox’s first green bond issuance, but didn’t anticipate the sheer strength of the investor appetite for corporate bonds with impeccable sustainability credentials, that are also underpinned by one of the few sectors that has boomed during the pandemic.’
Preston added: ‘This issuance follows the successful equity raise in March 2021, and together allows us to pursue our ambitious sustainability strategy, significantly cut our average cost of debt, and places us in pole position to deploy into our extensive pipeline of logistics developments, and extensions of existing assets, in some of Europe’s most supply-constrained markets, such as Germany, Italy, France Belgium and Netherlands. There are very few operators in European logistics real estate that have access to this level of pipeline and even less in the solidly green sustainable ‘big boxes’ that represent the industry’s route to a net zero-carbon future.’
Tritax EuroBox’s unsecured five-year green bonds mature in 2026 and have a coupon of 0.95%, significantly below its previous average cost of debt of 2.3% as at the end of March this year. As well as securing a record low coupon for a debut BBB real estate issuer, the syndicated debt was also the lowest ever coupon for a maiden issuance in the sector for a five-year maturity.
