Mindspace REIT becomes the First Indian REIT to issue Sustainability Linked Bond, raising INR 650 Crore from International Finance Corporation
MUMBAI, India, June 27, 2024 /PRNewswire/ — Mindspace Business Parks REIT (BSE: 543217 | NSE: MINDSPACE) (‘Mindspace REIT’), owner and developer of quality Grade A office portfolio announces its INR 650 Crore (6.5Bn) Sustainability Linked Bond Issuance that has been placed with International Finance Corporation (IFC), the private sector arm of the World Bank Group. The coupon of the bond is linked to Mindspace’s commitment to achieve certain ESG targets towards building a greener eco-system.
Issue Details
These bonds are issued for a tenure of 7 years. This issuance has been rated [ICRA] AAA(Stable) by ICRA Ltd. Shardul Amarchand Mangaldas & Co served as the legal counsel of the Issuer for this transaction.
The ESG Targets
Mindspace REIT has undertaken certain ESG targets critical to its operations. These include reduction in GHG emissions (Scope 1, 2 and 3), increasing the share of green certified area for existing buildings (under operations and maintenance), and reduction in energy intensity. The coupon of these bonds is fixed in nature, and shall be stepped down, in a staggered manner, basis achievement of the set targets.
Sustainability Linked Financing Framework
Mindspace REIT has put into place its maiden sustainability-linked financing framework under which Mindspace REIT and/or its SPVs can undertake issuances of sustainability linked instruments. The framework is based on five key components: 1) Selection of KPIs 2) Calibration of Sustainability Performance Targets 3) Sustainability-Linked Instrument Characteristics 4) Reporting and 5) Verification.
Second Party Opinion Provided by Bureau Veritas
Bureau Veritas, a ‘Business to Business to Society’ services company and a world leader in sustainability services, provided a second party opinion on the framework, confirming its alignment with Sustainability Linked Bond Principles (SLBPs), issued by the International Capital Markets Association and Sustainability Linked Loan Principles (SLLP) published by the Loan Market Association (LMA). Bureau Veritas also concluded that the Sustainability Performance Targets are ambitious, meaningful and relevant in the context of Mindspace REIT’s broader sustainability and business strategy, representing a material improvement over a predefined timeline.
Mr. Ramesh Nair, CEO, Mindspace Business Parks REIT, said, “We are thrilled to announce another significant milestone in our sustainability journey as we become the first Indian REIT to issue sustainability linked bonds. International Finance Corporation fully subscribed to this issuance. This follows our maiden green bond issue in March 2023. Post this issuance our cumulative green/sustainability linked financing now stands at INR 18.6 billion1, strengthening our commitment to responsible growth. Our purpose to ‘build sustainable ecosystems’ helps us create long-term value for stakeholders, blending financial success with the environmental and social benefits.”
“We are pleased to partner with Mindspace REIT for its maiden sustainability-linked bond,” said Wendy Werner, IFC Country Head for India. “IFC’s investment will help Mindspace enhance the sustainability of its portfolio of business parks and reduce greenhouse gas emissions year-on-year. This partnership aligns with India’s net-zero ambitions and demonstrates the viability of climate finance in the real estate sector. Our support aims to attract more diverse and long-term funding at a time when private capital is critical to build a greener, more resilient future.”
The Financing Framework and the Second Party Opinions are available on Mindspace REIT’s website: https://www.mindspacereit.com/investor-relations/debt-sustainability-linked-financing#ir
About Mindspace Business Parks REIT
Mindspace Business Parks REIT, sponsored by K Raheja Corp group, listed on the Indian bourses in August 2020. The REIT owns quality office portfolios located in four key office markets of India, namely Mumbai Region, Pune, Hyderabad, and Chennai, and is one of the largest Grade-A office portfolios in India. The portfolio has a total leasable area of 33.2 msf comprising of 26.3 msf of completed area, 4.4 msf of area under construction and 2.5 msf of future development. The portfolio consists of 5 integrated business parks and 5 quality independent office assets with superior infrastructure and amenities. It has a diversified and high-quality tenant base, with over 220 tenants as of March 31, 2024. Most of the buildings in the portfolio are either Gold or Platinum Green Building Certified (IGBC/LEED). The assets provide a community-based ecosystem and have been developed to meet the evolving standards of tenants, and the demands of ‘new age businesses’, making it amongst the preferred options for both multinational and domestic corporations. To know more visit www.mindspacereit.com
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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