Manulife US REIT signs first sustainability-linked loan
Proceeds of US$250 million facility to provide company with more financial flexibility
24 Mar 2021 | The Asset

Manulife US REIT (MUST) has obtained a US$250 million unsecured sustainability-linked loan from DBS and OCBC Bank, with both banks acting as sustainability advisers for the transaction.

This is MUST’s first sustainability-linked loan, which incorporates interest rate reductions linked to pre-determined sustainability performance targets, allowing MUST to enjoy savings in borrowing costs as it achieves these targets, which include efficient use of energy and water, and management of greenhouse gas (GHG) emissions, in relation to its nine US office properties.

The US real estate investment trust (Reit), a firm believer in responsible investing, focuses on four strategic sustainability areas – sustainable properties, external relations, human capital, and ethical corporate behaviour. In 2020, and for the third year running, MUST was awarded 5 Stars by the Global Real Estate Sustainability Benchmark (GRESB) assessment board, ranking fourth among the 15 listed US office Reits.

In addition, MUST received an A rating and was ranked first out of 10 Asia offices by GRESB for public disclosure. Its sustainability progress was also recognised by MSCI ESG with its rating upgraded from BBB to A in December 2020. Currently, 86.5% of MUST’s portfolio by gross floor area is green-building-certified by either LEED (Leadership in Energy and Environmental Design), Energy Star, or both.

“This sustainability-linked loan, which marks another first in our sustainability journey, provides us with more financial flexibility,” says Jill Smith, chief executive officer of Manulife US Real Estate Management, MUST’s manager. “We have always operated with the objective of conducting business responsibly, and this pandemic has made us more certain than ever that sustainability is the way forward.”