REIT WATCH

Index that profiles climate conscious Reits

THE Covid-19 pandemic has accelerated the already significant growth in environmental, social and governance (ESG) investing globally. According to Morningstar, net inflows for US sustainable open-end and exchange traded funds reached US$51.1 billion in 2020. Global assets under management leveraging ESG data has also doubled in four years to reach US$40.5 trillion in 2020, as shown in an Opimas report.

Investors in Asia are also hunting for green equities, bonds, funds, indices, businesses and real estate.

Within the context of green real estate investment trusts (Reits), and as previously published in The Business Times in December 2020, the Solactive CarbonCare Asia Pacific Green Reit Index is one of the latest indices - launched in November 2020. It is co-developed by Carbon Care Asia and Solactive and is focused on climate-conscious Reits that demonstrate strong sustainability performance and a commitment to meet the carbon reduction targets set out in the Paris Climate Agreement.

Based on its factsheet as of February 2021, the index has 49 constituents. These are picked out of 200 Reits in Asia-Pacific. Reits are assessed based on factors such as the percentage of Certified Green Building Area owned, a commitment to a Net Zero Emissions target no later than 2050 or a Science Based Target, market capitalisation and trading liquidity.

Of the 49, eight are Singapore Reits (S-Reits): CapitaLand Integrated Commercial Trust (CICT), Frasers Centrepoint Trust (FCT), Keppel Reit, Manulife US Reit, Mapletree Commercial Trust (MCT), Mapletree North Asia Commercial Trust (MNACT), SPH Reit and Suntec Reit.

These are some of their green building highlights:

  • CICT was formed from the merger of CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT). Based on their respective sustainability reports, all eligible properties in CMT and CCT's portfolios achieved the Building and Construction Authority (BCA)'s Green Mark certification. CCT and CMT's sustainability objectives and strategies are also aligned with sponsor CapitaLand's sustainability framework, policies and guidelines, ethics and code of business conduct.
  • FCT has four properties that are green building certified and two completing certification by end-April. It is aligned with its sponsor Frasers Property Group's sustainability framework, which in 2020 has set a net zero carbon target by 2050 and aims to green-certify 80 per cent of its owned and managed assets by 2024.
  • As of end-2019, all of Keppel Reit's Singapore assets held the Platinum status awarded by BCA. Its Australian properties that are operational have also achieved the 5 Stars National Australian Build Environment Rating System (NABERS).
  • Manulife US Reit had, as of end-2019, five of its nine properties certified Leadership in Energy and Environmental Design while seven are Energy Star certified. The Reit has also participated in the GRESB Real Estate Benchmark Assessment and recorded a score of 93, which is above the peer average of 72.
  • MCT has three out of five properties certified Green Mark Platinum and the remaining two certified Green Mark Gold by BCA. The Reit in October 2019 secured its first S$670 million green loan facility to part finance the acquisition of Mapletree Business City II.
  • MNACT has two assets that are green building certified and has completed the Phase 1 installation of 550 rooftop solar panels at Festival Walk in Hong Kong. The Reit also secured a S$174 million sustainability-linked loan in FY2020 tied to energy and water intensity improvements.
  • SPH Reit's malls in Singapore - The Clementi Mall and Paragon - are green building certified by BCA and certified by Singapore's national water agency PUB as Water Efficient Buildings. In its Australian portfolio, there are also plans for Figtree Grove to obtain a NABERS rating for FY2021.
  • Suntec Reit has six properties that are green building certified by BCA, NABERS and the Green Building Council of Australia. The properties in Singapore are Suntec City Mall, Suntec Singapore, One Raffles Quay and Marina Bay Financial Centre Properties. SGX RESEARCH
  • For more research and information on Singapore's Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.
  • Source: SGX Research S-Reits & Property Trusts Chartbook.

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