Sustainable finance

During 2018, Real Estate Capital heard from many players in the European real estate finance market. Here is a taste of what they had to say on the industry’s key topics.

An influx of capital to the sector, the return of CMBS and the hunt for extra yield were among the year’s most influential trends.

Across the world, real estate owners have made progress in making their portfolios sustainable. However, quantifying the impact of green practices on real estate investments remains difficult.

Providers of property debt can benefit from progress in ESG data and benchmarking provision, argues GRESB’s Josien Piek.

Effectively one step removed from real estate assets, lenders have not been at the forefront of the industry’s sustainability commitments. However, recent sustainable financing initiatives suggest times may be changing.

While real estate debt providers have made less progress than their equity counterparts to incorporate environmental, social and governance considerations into their strategies, some lenders have shown how it can be done.

The French REIT sources its second debt facility to be indexed on its GRESB rating.

A syndicate of 15 banks signs the five-year loan, with the margin of the debt facility linked to the French group’s ESG performance.

A £27m facility will be used by the business, which rents space to charities and social enterprises, to back its growth plans and a London office development.

Lenders stand to benefit from the growth of an ethical real estate finance market, beyond the obvious reasons.