The Ethical Property Company has secured a £27 million (€31 million) sustainability-linked financing package to support its expansion plans and to develop the Green House office building in East London.
The facility, which incorporates a term loan, a revolving credit facility and a development loan, has been provided through Lloyds Bank Commercial Banking’s Green Lending Initiative. As part of its agreement with Lloyds, the Oxford-based borrower will receive a margin discount on its loans of up to 20 basis points by adhering to several ‘green covenants’. The financing package is understood to have a maturity of three years plus two years.
The Ethical Property Company, which buys buildings and rents office and retail space on flexible leases at below-market rents to charities, will use a £10 million term loan and £2 million RCF to support its growth aspirations. The business will also use a £15 million development loan to enable the construction of the Green House.
The 47,000 square feet office scheme, will be built to a BREEAM Excellent rating with half of its structure made using sustainable cross-laminated timber. Under its commitment for the investment loan, the Ethical Property Company will increase capex spending on energy efficiency improvements to its existing assets and target operating its sites using energy entirely from renewable sources.
The funding package is the first agreement between the two parties.
“[The Ethical Property Company] remains committed to building and operating assets responsibly. This made them ideal candidates to benefit from our Green Lending Initiative and matches our own commitment to help Britain prosper through our debt funding activity,” said David Willock, Lloyds’ head of Midlands, South West & South Wales.