Championing low-carbon growth
The SEGRO European Logistics Partnership (SELP) was created in October 2013 as a 50:50 joint venture between SEGRO and Public Sector Pension Investment Board, the Canadian pension fund, with the objective to create a leading Continental European logistics platform, initially focused on six geographies, namely France, Germany, Poland, Czech Republic, Belgium and Netherlands.
Since then, SELP has also invested in big box warehouses in Italy and Spain, and a combination of acquisitions, development and capital value growth means that, at 31 December 2018, the portfolio was valued at €3.5 billion and generated €191 million of headline rent across 4 million square metres of lettable area.
In May this year, SEGRO published its Green Finance Framework, building on the Responsible SEGRO strategy launched in February 2021. The Framework, which applies to SEGRO, its subsidiaries and joint ventures including SELP, integrates its financial strategy with the three Responsible SEGRO commitments: 1) Championing low-carbon growth 2) Investing in our local communities and environments 3) Nurturing talent.
Eligible Green Projects, which can be financed through green bonds, loans and other debt products, must support SELP’s Responsible SEGRO commitments as well as the Group’s business strategy. These include the development and acquisition of buildings with high quality environmental certifications; refurbishments of existing buildings, which improve their energy efficiency; as well as projects, which encourage clean transportation, generate renewable energy, reduce pollution and have a positive influence on local biodiversity.
SELP prints record low coupon for inaugural Green Bond
Following the publication of its Green Finance Framework and a virtual roadshow, which over 60 investors attended, SELP announced its debut Green Bond offering. SELP has maintained investor engagement over the past years away from deal roadshows, allowing investors to develop their understanding of SELP, which was evident during the marketing for this green transaction.
With a final orderbook of EUR 725m, SELP printed the EUR 500m 8-year Senior Unsecured Green Notes at a record low coupon of 0.875%.
SELP deal highlights positive trend of major real estate companies opting for green, social or sustainable issuances
Soumen Das, Chief Financial Officer of SEGRO, said: “Climate change is the most significant long-term challenge facing the world and we are determined to play our part in tackling it. Our Green Finance Framework reinforces our commitment to investors in SEGRO and SELP that we will invest the proceeds of debt instruments, such as our inaugural Green Bond, in support of our Responsible SEGRO targets, particularly the ambition of being net-carbon zero by 2030.”
Sunil Kainth, Financing & Risk Solutions, NatWest, commented on the transaction: “After having supported SELP with their previous capital markets transactions in 2016, 2017 and 2019 in conventional format, we’re delighted to have been at SELP’s side for its green debut and were very pleased to see the comfort that investors have towards SELP’s credit and sustainability story. Climate is of paramount importance to our business, our customers and the economies we operate in, and we continue to support companies preparing their transition to sustainable operations such as SELP.”
Dr Arthur Krebbers, Head of Sustainable Finance, NatWest, added: “SELP’s first green transaction following its newly established Green Finance Framework continues the trend of major real estate companies opting for issuance in green, social or sustainable format; and we’re very pleased to have supported SELP’s successful green debut.”