Growthpoint lists first local green bonds

JSE-listed real estate investment trust Growthpoint Properties has issued a Green Bond on the JSE, the first local company to do so.The Growthpoint Green Bonds will be available in terms of five, seven and ten years and are aimed at raising capital solely allocated for funding projects that result in positive environmental and climate benefits.

The R1.1-billion Green Bonds would be used to fund the company’s green buildings and green initiatives and form part of Growthpoint’s R20-billion domestic medium-term note programme. It will mainly be used to refinance funding for the green office buildings in the new Growthpoint Thrive portfolio and specifically the ThrivePlatinum portfolio, which includes its top green-rated office properties.

In addition, suitable industrial and retail properties with four-star Green Star ratings or higher will also be eligible. Environmentalprojects related to Growthpoint’s buildings that have positive environmental impacts, such as solar energy projects, will also qualify for Green Bond funds.Growthpoint has a national scale Aaa.za Moody’s rating, with many banks opting to hold Growthpoint paper as high-quality liquid assets.

The Green Bonds were priced at 139 basis points for the five-year term, at 169 basis points for the seven-year term and at 200 basis points for the ten-year term above the three-month Johannesburg Interbank Agreed Rate.
The bond auction took place on March 6, and is believed to be the first public auction in South Africa for a ten-year bond for a real estate company.

The Growthpoint Green Bonds constitute green instruments falling within the Green Bond principles of the real estate sector and the green segment of the JSE’s interest rate market.
Growthpoint Properties CEO Norbert Sasse said: “This gives investors a unique opportunity to participate in supporting greater environmental sustainability and climate change mitigation and enables them to evaluate the environmental impact of their investment. We intend to continue to be a catalyst for a more sustainable property sector.”

Among the investors in the new Growthpoint Green Bonds is the African Local Currency Bond Fund (ALCB Fund), an initiative of KfW Development Bank and the German government backed by additional investors. In addition to anchor investments, the ALCB Fund offers technical assistance to cover transaction-related costs, including compliance with international Green Bond standards.