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Champion REIT secures first sustainability-linked credit facilities
Interest rate tied to sustainability-linked performance targets
9 Jun 2021 | The Asset

Hong Kong-listed Champion Real Estate Investment Trust (Champion REIT), owner of Three Garden Road and Langham Place, has signed its first sustainability-linked term and revolving credit facilities amounting to HK$3 billion (US$386.60 million) for five years.

The loan proceeds will be used for refinancing and general corporate funding purposes. The loan, announced on June 8, is backed by eight banks, including DBS (as sustainability adviser), Bank of China (Hong Kong), ICBC (Asia), Hang Seng Bank, Bank of East Asia, OCBC Bank, Citi and United Overseas Bank.

Based on the facilities agreement, Champion REIT will receive a discount on the loan’s interest rate once it achieved the pre-determined sustainability-linked performance targets. The performance targets are based on the aspects of environmental, social and governance (ESG), including Champion REIT achieving reduction in carbon intensity, attaining WELL Building Standard and retaining its listing on the Hang Seng corporate sustainability benchmark index.

The targets are aligned with Champion REIT’s 2030 ESG plan, established in 2019, which set the reduction of carbon intensity by 42% as one of the key performance indicators. The financial incentive is expected to reinforce the company’s commitment to embracing sustainability in every facet of its operations.

Over the years, Champion REIT's commitment to sustainability excellence has gained local and international recognition. This includes the WELL core certification at Platinum level under the WELL Building Standard by the International WELL Building Institute being awarded to Three Garden Road, making it the first existing building in Hong Kong to score at the highest level of WELL certification. Moreover, Champion REIT was chosen as a constituent of the Hang Seng corporate sustainability benchmark index for the fifth consecutive year and was included in the Hang Seng ESG 50 index in 2020.

Champion REIT CEO Ada Wong describes the facilities as an important milestone in their sustainability journey and reinforces their commitment to driving ESG performance over the past several years. “This partnership demonstrates well how we have achieved financial value and business benefits by embracing sustainability,” she adds.