CapitaLand Investment, LReit slip from top rankings in global ESG benchmark for real estate
CapitaLand Integrated Commercial Trust tops the ranking this year, along with Frasers Logistics and Commercial Trust, and Hongkong Land
REAL estate organisations CapitaLand Investment (CLI) and Lendlease Global Commercial Real Estate Investment Trust (LReit) have slipped from their top positions in a well-tracked environmental, social and governance benchmark for the real estate sector in its 2024 ranking.
Both Singapore-listed companies were not ranked as global sector leaders among listed entities in either of the two real estate benchmarks. The 2024 results were published by the Global Real Estate Sustainability Benchmark (GRESB) on Monday (Oct 28) evening, Singapore time.
CLI received a four-star rating for the standing investments benchmark, a decline from its five-star rating last year, when the company was recognised as a global sector leader among listed entities in the diversified category.
LReit achieved the same recognition, but in the retail category, last year. It did not reveal its GRESB performance this year.
The standing investments benchmark looks at how well property companies and Reits manage their portfolios containing buildings that are in operation.
While CLI had dropped a notch in the ratings, its business trust CapitaLand Integrated Commercial Trust topped the ranking this year, along with Frasers Logistics and Commercial Trust , and Hongkong Land.
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This is the first time all three property groups were recognised by GRESB as global sector leaders among listed entities in the diversified category for its standing investments benchmark.
They join CapitaLand Ascott Trust, which retained its position as a global sector leader among listed companies in the hotel category for the fourth consecutive year.
While LReit had dropped out of the standing investments benchmark this year, its subsidiary Parkway Parade Partnership remained a global sector leader for non-listed entities in the retail category.
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Besides topping the standing investments benchmark, Hongkong Land also retained its ranking as a global sector leader among listed entities in the diversified category in another benchmark.
This development benchmark assesses portfolios with new uncompleted constructions and significant renovation projects. Hongkong Land had topped this benchmark for the first time in GRESB’s 2023 rankings.
GRESB – which is used by more than 170 institutional and financial investors to inform decision-making, including interest rate savings from sustainability-linked loans – ranks entities yearly based on these two benchmarks.
While CLI experienced a decline in its GRESB performance, it will still be able to receive interest rate savings on its sustainability-linked loans, the property company said previously. GRESB typically notifies companies of their scores before releasing the full list of rankings.
CapitaLand Integrated Commercial Trust and CapitaLand Ascott Trust will also be able to get discounted rates on sustainability-linked loans based on their 2024 GRESB performance.
These loans are debt instruments that offer borrowers an interest rate discount if they are able to meet pre-defined sustainability key performance indicators (KPIs).
As at Sep 30, CLI and its listed Reits and business trusts have secured a total of S$19.6 billion in sustainable finance, including from KPI-linked instruments, green loans and bonds, as well as perpetual securities. Out of these, S$7.4 billion are sustainability-linked loans tied to GRESB performance.
In 2024 alone, these entities secured S$3.5 billion through 18 sustainable financing instruments, of which S$1.1 billion were from six sustainability-linked loans, where the targets are tied to their performance on GRESB.
CapitaLand India Trust also improved its GRESB scoring with a five-star rating for standing investments for the first time, from a four-star rating last year.
Vinamra Srivastava, CLI’s chief sustainability and sustainable investments officer, said the alignment between sustainability and financial performance “creates tangible long-term value for our investors, as we channel interest rate savings back into decarbonisation investments”.
As for Frasers Property, six of its business entities achieved five-star ratings across both benchmarks, in addition to Frasers Logistics and Commercial Trust, although that was the only entity recognised as a global sector leader.
Zheng Wanshi, group chief strategy and sustainability officer of Frasers Property, said that the group’s overall results are a testament to its efforts to enhance sustainability performance.
“As we make further headway on our sustainability journey, greater learning and collaboration as well as innovation and technology will play an important role in driving portfolio resilience that delivers better long-term value for our stakeholders,” she added.
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