US-headquartered private equity (PE) firm, Blackstone, announced last Thursday (Oct 12) that funds managed by its real estate arm had obtained A$1.45 billion ($930 million) in the form of a sustainability-linked loan (SLL). The transaction constitutes the largest SLL lent to Australia’s industrial sector to date.
A spokesperson for Blackstone confirmed with FinanceAsia that the SLL was secured against the firm’s Australian real estate and logistics portfolio and was issued in three and five-year tenors.
The landmark deal also marks Blackstone’s first sustainability-linked transaction in the Asia Pacific region.
“Blackstone believes that assets with strong ESG credentials are rewarded in capital markets, creating value for our investors,” the spokesperson told FA.
“We’re thrilled to secure our first third-party verified SLL in the region, which we believe will improve the performance of our assets, the overall experience for our occupiers, and drive long-term value for our investors,” Eric Duchon, global head of ESG at Blackstone Real Estate, noted in the press release.
Environmental, social and corporate governance (ESG) ratings company, Sustainalytics, was mandated to provide second-party opinion, the Blackstone spokesperson confirmed with FA. Sustainalytics will review progress and ensure the facility’s alignment with industry principles based on selected key performance indicators (KPIs) and calibration of sustainability performance targets (SPTs),
Meanwhile, MUFG Bank acted as sole sustainability coordinator across the transaction. A spokesperson for the Japanese bank told FA that its team worked with the PE player to structure targets across green property development, including ratings, green lease clauses and on-site solar installation projects. Blackstone was not in a position to elaborate further.
Blackstone is the world’s largest commercial real estate owner as of June 30, with $585 billion in assets across its property portfolio and $333 billion in investor capital under management. The firm is also one of the largest owners of logistics globally with a portfolio spanning 1.1 billion square feet.
“We’re proud to be at the forefront of the industrial sector in Australia, where we’ve built a high-quality portfolio of more than 140 logistics assets and executed some of the country’s largest transactions in the sector,” said Chris Tynan, head of real estate Australia at Blackstone, in the release.
Morgan Stanley, MUFG, National Australia Bank (NAB) and United Overseas Bank (UOB) acted as joint mandated lead arrangers, underwriters and bookrunners (MLAUBs) for the transaction.
“MUFG has a strong commitment to decarbonisation… We are committed to net zero in our own operations by 2030 and in our financed portfolio by 2050,” said the bank’s spokesperson.
The Japanese lender has committed to provide 35 trillion yen ($330 billion) in sustainable finance by 2030, and has achieved over 70% of this target as of financial year 2022, according to a September press release.
MUFG is a member of the United Nations (UN) convened Net Zero Banking Alliance (NBZA) and was appointed as a lead for the financing and engagement work track group in 2021. The spokesperson told FA that its teams had set up various interim targets for different sectors within the bank’s portfolio. Emission intensity from its property portfolio was measured to devise its 2030 real estate sustainability target.
NAB declined to comment on this specific development. Morgan Stanley and UOB did not respond to FA’s requests for comment prior to publication.
