QIC raises $300m green bond for shopping centres

QIC raises $300m green bond for shopping centres

9 August 2019

In a world first for the retail property sector, the QIC Shopping Centre Fund (QSCF) has issued an AUD300 million Climate Bond certified green bond, enabled by QIC Global Real Estate’s (QIC GRE) commitment to enhancing environmental performance across its Australian retail portfolio.

The issuance is rated green because the proceeds are allocated to a select pool of assets within the fund – Eastland mall in Melbourne, Grand Central at Toowoomba and Robina Town Centre on the Gold Coast – where QIC is rolling out a series of initiatives to improve sustainability.

Managing Director of QIC GRE, Michael O’Brien, said: “Issuing a green bond is an important milestone for QSCF and the retail property sector globally, and is an endorsement of QIC GRE’s progress and ongoing focus on sustainability.

“For QIC GRE, delivering sustainability initiatives such as upgrades and the intelligent automation of centre plant and equipment, and installing LED lighting, generates strong commercial outcomes, as well as reducing our environmental footprint.

“This is why we have been on a pathway of environmental performance enhancement as we continue to evolve our assets into retail-led, mixed-use destinations.

“The QSCF green bond was five times oversubscribed and attracted new investors with green and ESG investment mandates to the Fund from across Asia and Australia,” Mr O’Brien said. QSCF is one of QIC GRE’s flagship investment vehicles, with interests in retail assets across Australia valued at circa AUD15 billion (as at June 2019).

Fund Manager of QSCF, Michael Fattouh, said: “We are continuing to progress opportunities to align QSCF’s capital management strategy, that seeks to diversify its sources of funding, with QIC GRE’s strategy of driving sustainability initiatives across our retail portfolio.

“In an Australian retail property first, in 2017 the Clean Energy Finance Corporation (CEFC) collaborated with QSCF via an AUD200 million senior debt facility which included a framework to undertake improvements in energy performance across QSCF’s shopping centre portfolio.

“Building on this collaboration, we are very pleased that the CEFC has also made a cornerstone investment of AUD30 million in the QSCF green bond.

“We continue to explore a range of opportunities in the area of green financing as a viable method of diversifying our sources of funding and achieving sustained environmental improvements at the assets we own and manage on behalf of our investors.”

In April this year, Woolworths’ first green bond issue – $400 million, five-year instrument – got off to a solid start in its early trading in the debt market.

Three years ago Monash University raised $218 million from US capital markets, after issuing a ‘climate bond’ that was certified by EY.

NAB’s chief customer officer for corporate & institutional banking, David Gall, said the QIC bond was the seventh green or sustainable bond the bank has brought to market so far in 2019, and its 25th green, social and sustainability bond to date.