ESR secures US$2.5 billion syndicated sustainability-linked facilities

• Largest syndicated sustainability-linked facilities secured by ESR to-date and one of the largest in Southeast Asia’s real estate sector in 2024
• Brings ESR’s total sustainable financing secured to-date to close to US$7 billion

SINGAPORE, 12 December 2024 – ESR Group Limited (“ESR” or the “Company”, together with its subsidiaries as the “Group”; SEHK Stock Code: 1821), APAC’s leading New Economy real asset manager, has secured a landmark five-year syndicated sustainability-linked term loan and revolving credit facilities (“SLL”) totalling US$2.5 billion. With this latest SLL, ESR has secured 11 sustainability-linked loans totalling close to US$7 billion, reinforcing the Group’s leadership in sustainable financing and operations.

Aligned with ESR’s Environmental, Social, and Governance (“ESG”) 2030 Roadmap targets, this latest SLL establishes the highest standards across ESR’s existing SLLs, driven by the Group’s continual improvement in its ESG performance. Additionally, it represents the largest SLL raised by ESR to-date and is one of the largest within the real estate space in Southeast Asia in 2024.

This SLL features an interest rate reduction structure based on two key performance indicators (“KPIs”): Annual increases in ESR’s total solar power capacity from completed directly managed properties and year-on-year improvements in the percentage of ESR’s completed directly managed properties achieving ‘high’ sustainability certifications and ratings, as defined in the ESG Data Summary in the Group’s annual ESG Report. Examples include a minimum certification of Gold in LEED (Leadership in Energy and Environmental Design), and a rating of 5 stars in NABERS (National Australian Built Environment Rating System).

As ESR progressively increases its installed solar power capacity and improves the sustainability certifications and ratings of its assets, the interest rate will be reduced based on the prespecified performance targets, enabling the Group to achieve lower borrowing costs. Proceeds will be used for general corporate purposes, working capital, and existing debt refinancing.

Ivan Lim, ESR Group Chief Financial Officer, said, “Against a backdrop of sector headwinds and market volatility, our latest SLL is well supported by a core, yet diverse, group of lenders with deep knowledge of the real estate sector. Liquidity garnered from the market bears testament to our market leadership and our capability in securing competitively priced financing from the syndicated loan market. It also reflects our unwavering commitment to ESG. As part of our ESG 2030 Roadmap targets under the Property Portfolio pillar, we aim to set up 1,000 MW of solar power capacity on the rooftop of our assets and attain sustainable building certifications and ratings for 50% of the Group’s portfolio. This SLL will support ESR as we align ambitious sustainability goals with financial outcomes.”

ESR achieved outstanding results in the 2024 GRESB assessment, the global ESG benchmark for financial markets in addition to the Institutional Shareholder Services (“ISS”) QualityScores by enhancing ESG oversight and policies, strengthening systems and processes, as well as improving sustainability performance and disclosures. 12 entities achieved a 5-Star rating, placing them among the top 20% of global GRESB-rated entities. In the latest ISS QualityScore ranking, ESR was placed within the top percentile of over 600 companies listed in Singapore, Hong Kong, and China.

ESR’s latest SLL was led and arranged by the Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, Mizuho Bank, Ltd., MUFG Bank, Ltd., Oversea-Chinese Banking Corporation Limited, United Overseas Bank Limited, and CIMB Bank Berhad, Singapore Branch.

Moody’s Investors Service was appointed to provide a second-party opinion on the KPIs and Sustainability Performance Targets (“SPTs”), which are aligned with the Loan Market Association, the Loan Syndications & Trading Association and the Asia Pacific Loan Market Association’s Sustainability-Linked Loan Principles 2023. The opinion covers an independent assessment of the SPTs’ consistency with the borrower’s sustainability strategy and considered them as overall ambitious against business-as-usual, industry peers’ targets, and industry standards.