• OUE REIT’s first sustainability-linked loan referencing its recalibrated 40% absolute GHG emission reduction target
• 2.0 times oversubscribed by 12 banks
• Pro forma average term of debt as of 31 December 2023 will lengthen to 3.1 years, while proportion of unsecured debt significantly increased to 86.7% post refinancing
• No further refinancing requirements until the second half of 2025 where only 25% of the total debt is due post refinancing

OUE REIT Management Pte. Ltd., in its capacity as manager of OUE Real Estate Investment Trust (“OUE REIT”, formerly known as “OUE Commercial REIT”), is pleased to announce that OUE REIT has successfully obtained an unsecured sustainability-linked loan totalling S$600 million for the early refinancing of S$540 million existing secured borrowings due in 2025 and for general corporate purposes.

The SLL was launched with an initial loan amount of S$540 million and a greenshoe option of up to S$60 million. Backed by strong support from a total of 12 banks, the SLL was oversubscribed by 2.0 times and was subsequently upsized to S$600 million including the greenshoe. OCBC Bank was the sole Mandated Lead Arranger and Bookrunner as well as the sustainability coordinator for the transaction.

With the new facility in place, OUE REIT has no further refinancing requirements until the second half of 2025 where only 25% of the total debt is due. Post refinancing, the average term of debt as of 31 December 2023 will lengthen to 3.1 years on a pro forma basis, with the weighted average cost of debt expected to remain largely stable. The proportion of unsecured debt will also significantly increase to 86.7% post refinancing on a pro forma basis.

This facility is OUE REIT’s first SLL which references its recalibrated sustainability performance targets announced on 29 February 2024, allowing OUE REIT to enjoy savings in interest costs when the reduction target of absolute Greenhouse Gas (“GHG”) emissions of commercial properties is achieved. OUE REIT has advanced its commitment to sustainability by replacing its previous target based on energy intensity with a more ambitious goal of achieving a 40% reduction in absolute GHG emissions for its commercial properties, using FY 2023 as the base year.

Mr Han Khim Siew, Chief Executive Officer of the Manager, said, “We are grateful for the tremendous support from our existing and new banking partners. This serves as a strong testament to our solid fundamentals, prudent capital management and commitment to sustainability. The increase in the proportion of unsecured debt also enhances OUE REIT’s access to more diverse and competitive source of fundings while keeping borrowing costs stable. Going forward, we will continue to leverage on our investment-grade credit rating and strengthened relationships with our bankers to enhance our capital structure for the benefit of all Unitholders.”

Related Article: BCG’s 2023 Sustainability Report Highlights Progress and Innovative Solutions

Ms Elaine Lam, Head of Global Corporate Banking, OCBC, said, “We are glad to support OUE REIT with its first SLL referencing its ambitious new goal of achieving a 40% reduction in absolute GHG emissions for its commercial properties. Over the course of our longstanding partnership with OUE REIT, their commitment to decarbonisation and sustainability has always been clear and strong. This partnership with OUE REIT underscores our own commitment to enable and support our customers to transition to a low-carbon future.”