The CEFC has made a cornerstone investment of $30 million in the QIC Shopping Centre Fund (QSCF) green bond, the first Climate Bonds Initiative certified green bond issued by a retail property landlord globally, and an exciting milestone in the development of Australia’s green bond market.
The $300 million green bond will fund initiatives to enhance the environmental performance for three of the retail assets within QSCF’s portfolio: Toowoomba’s Grand Central, Robina Town Centre on the Gold Coast and Eastland in Melbourne.
Improvements include energy-efficient technologies such as new building management systems, LED lighting, heating and cooling systems, and a potential solar rooftop program. The work is expected to reduce the centres’ greenhouse gas emissions intensity by more than 35 per cent in the next three years.
QIC Global Real Estate’s (QIC GRE) QSCF is one of the largest shopping centre owners in Australia. It is also implementing a program of energy efficiency upgrades across its other 11 assets.
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Australian shopping centres account for 36 per cent of commercial building energy consumption. Ongoing improvement in energy efficiency is vital to reducing the load on the electricity grid.
CEFC debt market lead Richard Lovell said the market would expect to see new types of green bonds issued by Australian corporates as they continue to increase their focus on sustainability and energy efficiency.
“This green bond has been certified by the Climate Bonds Initiative under the Low Carbon Buildings – Property Upgrade sector criteria,” Mr Lovell said.
“It is a great example of the benefits that can arise from working on transforming a corporate’s asset base energy efficiency.
“We have worked with QSCF since 2017 regarding setting ambitious sustainability targets. Their program of works delivers reduced energy costs and emissions, and a lighter load on the electricity grid. It also establishes QSCF as a market leader in sustainability, with this bond attracting a new pool of green investors.”
QSCF fund manager Michael Fattouh, said the green bond was well received by investors across Asia and Australia, attracting investors with green and ESG investment mandates who are new to QSCF.
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“We are proud to have achieved this world first for the retail property sector and deliver on the objectives of our investors to make meaningful and tangible progress towards enhancing our sustainability performance,” Mr Fattouh said.
“This green bond builds on the $200 million senior debt facility the QSCF secured via the CEFC in 2017 which included a framework to undertake improvements in energy performance across the QSCF shopping centre portfolio.
“With the rapid growth of green financing and impact investors globally, we will continue to progress opportunities to align QSCF’s capital management strategy, that seek to diversify its sources of funding, with QIC GRE’s ambition to drive sustainability initiatives across the retail portfolio we own and manage on behalf of our investors.”
Read more about how the QSCF is tapping into clean energy to help make the retail property sector more sustainable in this CEFC Investment Insights report.