UOB, DBS, StanChart provide S$945m green loan to Allianz, Gaw for Duo deal

Singapore

UNITED Overseas Bank (UOB), DBS Bank and Standard Chartered Bank (Singapore) have teamed up to extend a S$945 million green loan to Allianz Real Estate and Hong Kong private equity firm Gaw Capital Partners.

The syndicated loan will finance Allianz's and Gaw's S$1.575 billion joint acquisition of Duo Tower and Duo Galleria from M+S, the national joint venture between Malaysia and Singapore.

Duo Tower is an office block with 570,000 square feet (sq ft) of prime Grade A commercial space, while Duo Galleria has 56,000 sq ft of retail space. They make up part of a signature mixed-use project in Singapore's Ophir-Rochor precinct.

Both Duo Tower and Duo Galleria have held the Green Mark Platinum Certification awarded by the Singapore Building and Construction Authority since 2013.

This certification is in recognition of the development's green features, such as the low-emissivity glass exterior, rainwater-harvesting system and surrounding green landscape. The low-emissivity glass reduces the amount of heat entering the building, thereby lowering the energy needed to power air-conditioning.

UOB, DBS and StanChart were the green loan advisers, joint mandated lead arrangers, underwriters and bookrunners to Ophir-Rochor Commercial (ORC), the joint venture between Allianz and Gaw. UOB also acted as the facility and security agent to the syndicated green loan.

Lim Lay Wah, UOB's global head of financial institutions group, said: "The real estate sector has been leading the charge in the demand for green financing, with more property owners, managers and financial sponsors upholding sustainability standards as part of their climate action efforts."

Likewise, Chew Chong Lim, managing director and global head of real estate, institutional banking group at DBS, said the bank is encouraged by the "steady traction in green and sustainability-linked loans from the real estate industry".

Singapore is also fast becoming a hub for green and sustainable loan issuances, with more than US$6 billion of loan issuances between 2018 and October 2019, according to Patrick Lee, chief executive of StanChart Singapore.

The green loan was structured according to ORC's green loan framework, which is aligned with the Green Loan Principles issued by the Loan Market Association in 2018. KPMG in Singapore also provided independent limited assurance on ORC's green loan framework.

Separately, M+S is selling the hotel component of the Duo project, Andaz Singapore, to local property developer Hoi Hup Realty for S$475 million, as announced in October. Last week, Hoi Hup Realty announced that it has secured a S$332.5 million green club loan to partially finance its acquisition of the Hyatt-branded luxury hotel. OCBC Bank acted as the green loan adviser, while Maybank Singapore and UOB were the other club banks under that facility.