Significant growth expected in the green property bond market
Amsterdam, June 3, 2015 – GRESB, the leading standard for sustainability performance measurement and benchmarking in the real estate industry, today released Green Bond Guidelines for the Real Estate Sector. The Guidelines complement the Green Bond Principles (GBP) by providing specific real estate and construction sector guidance for capital market participants when originating and/or investing in green bonds.
Global green bond issuance tripled to $36.6 billion in 2014, with yet another tripling to $100 billion projected in 2015. To date five major listed property companies, all of which participate in the annual GRESB benchmark, have issued green bonds. This new source of financing allows issuers to diversify their investor base and direct proceeds to projects with improved environmental outcomes.
The Green Bond Guidelines for the real estate sector have been developed in response to a need expressed by investors and early market participants who seek clarification and further guidance on how to identify, report and communicate outcomes of green bonds related to real estate.
Nicholas Pfaff, Senior Director at the International Capital Market Association (ICMA) remarked, “The GBP Executive Committee welcomes these Guidelines from GRESB which will be posted on the GBP website as a resource for GBP Use of Proceeds.”
Suzanne Buchta, Head of Green Bonds Americas at Bank of America notes, “The real estate sector is a logical starting point for sector specific green bond guidance. Robust third party certification standards for green buildings are well-established globally, and provide a ready framework to tap into for communicating impacts to investors.”
The Guidelines specify reporting concepts, timing and metrics for Green Property Bonds from origination to maturity in accordance with established real estate industry protocols, and are applicable to each bond type outlined in the 2015 Green Bond Principles. Issuers, underwriters and investors can use these Guidelines to identify Eligible Green Projects, specify appropriate metrics, and determine reporting constructs for green bonds related to real estate.
Nils Kok, CEO of GRESB: “Green bonds are attracting new types of capital to the property sector, with market growth set to benefit developers, owners, investors, as well as the environment. As a new source of financing linked to environmental impacts, Green Property Bonds have the potential to further enhance the sustainability performance of the global real estate sector.”
In developing the real estate Green Bond Guidelines, GRESB has drawn on the expertise and recommendations of various industry stakeholders including leading institutional investors, listed property companies, green bond underwriters, and several of the largest green building certification bodies worldwide. GRESB will convene a working group comprised of existing and potential Green Property Bond issuers, underwriters and investors to provide a forum for ongoing input, and create a catalyst for market growth.
For further information please contact Rumyana Hristova at GRESB tel. +31(0)207740220, email [email protected]
GRESB is an industry-driven organization committed to assessing the sustainability performance of real estate portfolios (public, private and direct) around the globe. More than 150 members, of which close to 50 are pension funds and their fiduciaries, jointly representing USD 11.2 trillion in assets under management, use the GRESB benchmark results throughout the investment management and engagement process, with a clear goal to optimize the risk/return profile of their real estate investments. GRESB has covered more than 1000 property companies and funds globally since its launch in 2009. For more information, visit www.gresb.com