Growthpoint Properties, SA’s largest primary JSE-listed real estate investment trust (Reit), has received R1bn ($54m) green bond funding from the International Finance Corporation (IFC), a member of the World Bank Group (WBG), to boost its sustainability journey.
The green bond, a form of financing that delivers environmental benefits, will help the company fund green improvements across its industrial, retail and office portfolios in SA. These improvements are expected to reduce carbon dioxide (CO2) emissions from the company’s portfolio by more than 18,000 tonnes annually.
Gerald Völkel, Growthpoint group financial director, said the green bond supports the company’s environmental, social and governance (ESG) strategy and renewable goals, and provides further funding diversification.
“We are committed to creating space to thrive with innovative and sustainable property solutions in environmentally friendly buildings, while improving the social and material wellbeing of individuals and communities,” said Völkel.
Growthpoint owns a diversified property portfolio across Africa, Australia, the UK and Eastern Europe. It also owns a 50% stake in the V&A Waterfront in Cape Town.
The bond will also help Growthpoint refinance its green office building located at 144 Oxford in Rosebank, Johannesburg.
Völkel said the group intends certifying the entire portfolio of buildings as carbon neutral by 2050. This includes reducing its greenhouse-gas emissions by 25% and increasing its renewable-energy use by more than five times by 2026.
The R1bn green bond issuance was issued under Growthpoint’s existing domestic medium-term note (DMTN) programme. It aligns with IFC’s strategy to green the commercial sector in SA by further developing capital markets, promoting climate-smart investments and crowding in climate-relevant private capital.
“IFC is committed to accelerating access to green and sustainable buildings in SA to address climate change, protect the environment and support economic activity,” said Adamou Labara, IFC country manager for SA.
Labara said the green bond investment will contribute to greater climate-change resilience in the country by supporting climate-smart infrastructure and reduce the private sector’s carbon footprint.
Absa Corporate and Investment Banking (CIB) acted as bond advisers for the transaction and helped Growthpoint with the private placement of the bond on the JSE. The bank said with limited access to green funding in the country, deals like these are vital to finance projects and initiatives that provide alternative energy and ensure continuous water supply.
“This deal demonstrates our commitment to supporting our clients on their ESG journey and our ability to deliver tailored solutions by linking clients’ sustainable growth strategies with their financing,” said Heidi Barends, head of sustainable finance at Absa CIB.
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