OCBC Bank provides first property green loan in South Korea to M&G Real Estate
OCBC Bank is pleased to announce that it has provided its first green loan in South Korea of KRW115 billion to M&G Real Estate Asia (“M&G”). The loan will refinance an investment in Northgate, a green building in Seoul’s Central Business District. OCBC Bank is the sole lender and green advisor.
This transaction is the first green loan in South Korea supporting the property sector. It also marks the first sustainable finance transaction in South Korea for OCBC Bank.
The loan proceeds will be used to refinance existing advances within M&G Asia Property Fund which have been extended for the investment in Northgate. M&G Asia Property Fund is an institutional core open-ended real estate fund investing in high quality real estate assets across the Asia Pacific region managed by M&G.
Northgate is a high-rise office building within the Seoul Central Business District which received the Leadership in Energy and Environmental Design (LEED) for Existing Buildings Operations and Maintenance Gold rating from the U.S. Green Building Council in 2016. The building’s notable green features include rainwater recycling systems, water efficient fixtures, LED lightings in common areas, Building Automation Systems to control Heating Ventilation & Air Conditioning and lighting fixtures. Environment-friendly materials are also used in the cleaning and general upkeep of the building. As of May 2020, Northgate’s ENERGYSTAR site EUI (Energy Use Intensity) score is 43.9, significantly lower than US office buildings’ median EUI score of 86.5.
Richard Van Den Berg, Fund Manager, M&G Asia Property Fund, said “We are pleased to partner with OCBC to diversify our capital structure that is in line with M&G Real Estate’s commitment to investing responsibly to deliver financial benefits and positive social value.”
Elaine Lam, Head, Global Corporate Banking, OCBC Bank, said, “We are delighted to partner M&G, a leading real estate fund in this landmark transaction, the first green loan in South Korea’s property sector. We hope that this will continue to spur developments in sustainable financing across industries and real estate asset classes in the region. To this end, we look forward to broader and deeper partnerships with our customers, as we aspire to grow our sustainable finance portfolio to S$25 billion by 2025.”
The green loan was issued under a green loan framework (“Framework”) that was prepared together with OCBC Bank in accordance with the Green Loan Principles issued in 2018 and updated in 2020 by the Asia-Pacific Loan Market Association, Loan Market Association and Loan Syndications and Trading Association.