Barings issues sustainability-linked loan to retrofit Brewery retail park in London
Real estate investment management firm Barings has agreed a £48.6m package for two sustainability-linked loans that will see a retail part in London and office buildings in the Netherlands refurbished and retrofitted with low-carbon solutions such as onsite renewables, electric vehicle (EV) charging and thermal energy storage systems.
Barings will use the loan to finance the acquisition of The Brewery, a retail and leisure park in Romford, and to support a company managed by Round Hill Capital to finance the refurbishment of the Rembrandt Park One building in Amsterdam.
On the Brewery, the loan will help improve ESG credentials. Barings will work with Schroders Capital UK Real Estate Fund and Immobilien Europa Direkt to retrofit existing buildings on the retail park to increase Energy Performance Certificate (EPC) ratings and maintain current BREEAM Excellent ratings.
The loan will be used to invest in initiatives that enhance biodiversity net-gain and health and wellbeing and tap into local energy networks through EV charging facilities and onsite solar photovoltaics.
Barings has also provided a loan for the refurbishment of the Rembrandt Park One building in Amsterdam. It will help transform the building into a “Grade A sustainable office building”, with an end goal of achieving BREEAM Excellent and an Energy Performance Label rating of A. It will include onsite renewables and a thermal energy storage system.
Barings’ head of European and APAC Real Estate Debt said: “These loans are not only substantial additions to our growing real estate debt offer, but also an example of our appetite to innovate in order to seek greater returns for investors and make a tangible environmental impact.
“Secured against strong assets, both of which have great potential to perform even more impressively amid Amsterdam’s Grade A office shortage and the arrival of the Elizabeth line and regeneration in Romford, these loans are valuable additions to our books.”
The sustainability-linked loan for the UK project has been created with investor Phoenix Group.
Phoenix Group is the UK’s largest long-term savings and retirement firm, controlling subsidiaries including Standard Life, ReAssure and Sun life. The Group is responsible for around £310bn of assets under management on behalf of more than 13 million customers.
Last year, the company announced an ambition to cut the emissions intensity of its entire £310bn investment portfolio by at least 50% by 2030. Some £160bn of Phoenix Group’s investment portfolio consists of pensions.
Phoenix Group’s head of property Prabjot Mann said: “Phoenix is delighted to have provided £48.6 million of funding for Barings’ first sustainability-linked loan in the UK.
“This investment is closely aligned to Phoenix’s sustainability agenda; we have significant appetite for real estate loans which motivate borrowers to upgrade existing assets due to the dual benefits of improving the property’s environmental and social impact as well as supporting long term value.”
edie recently spoke to the Group’s head of responsible investment Sindhu Krishna on how the finance sector can help drive the progress towards net-zero by using its influence and voice to inspire others to act. Read that interview here.
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