Real estate investment group issues $300 million green bond

A leading real estate developer and investment group has become the largest non-bank ASX listed issuer of green bonds to date by issuing a second green bond.

Lendlease has issued a $300 million green bond, its second in five months. Its debut green bond was for $500 million and was issued in October 2020. Both bonds were oversubscribed, the company said.

The new $300 million 10-year fixed rate green bond pays a coupon of 3.7%.

Bond proceeds will be used to support the delivery of green buildings and are earmarked to eligible projects within Lendlease's $110 billion global development pipeline - including 22 major urbanisation projects such as Sydney's Barangaroo, the UK's International Quarter London and Chicago's Southbank.

This second green bond issue follows Lendlease's announcement of two new sustainability targets - committing to net zero carbon for scope 1 and 2 emissions by 2025, and absolute zero carbon across all operations, including the supply chain, by 2040, and committing to the creation of $250 million of measured social value by 2025.

"At Lendlease, we're firmly of the view that truly great places must deliver positive environmental and social outcomes while also creating value for our securityholders," said Frank Krile, acting group chief financial officer. "Lendlease is now the largest non-bank ASX-listed issuer of green bonds to date - highlighting growing demand from the investment community for opportunities to support projects with strong sustainability credentials."

The bond has been issued under a Sustainable Finance Framework aligned with the ICMA Green Bond Principles 2018, the Social Bond Principles 2020 and the Sustainability Bond Guidelines 2018.

The success of the bond paves the way for future issuance under the new Sustainable Finance Framework which has been established to facilitate future green, sustainable and social financing initiatives across Lendlease's global portfolio, Lendlease said.

ANZ, Bank of China, Commonwealth Bank of Australia and HSBC were mandated as Joint Lead Managers of the transaction. ANZ, Commonwealth Bank of Australia and HSBC were mandated as Green Bond Advisors.

Other real estate developers have also set ambitious net zero targets - recently, Stockland announced it will have net zero carbon emissions across its portfolio of nearly $6.2 billion by 2028, two years earlier than its earlier commitment. The target will encompass all of its assets.

Stockland said it will achieve its Net Zero Carbon target through continuing the successful rollout of renewable energy, portfolio electrification and pioneering a number of innovations to reduce its overall carbon footprint.

Read more: green bondLendleaseNet Zero CarbonICMA Green Bond Principlessocial bond