First Green Loan for Singapore Leading Industrial Developer

The Loan – which is compliant with the Green Loan Principles¹ (“GLP”) – will be used to build Soilbuild’s third Green Mark Platinum build-to-lease business space with a proposed gross floor area of 1.1 million sq ft located within the vibrant Paya Lebar iPark precinct.

The transaction marks Soilbuild’s first use of green finance, underscoring the Group’s commitment to growing its portfolio of properties in a manner which ensures a sustainable future. On completion, the Project is expected to meet the Building and Construction Authority’s Green Mark Platinum certification standards, which is the highest certification for green buildings in Singapore.

HSBC Singapore is the Sole Green Structuring Arranger for Soilbuild’s Green Finance Framework while HSBC Singapore and OCBC Bank acted as joint Mandated Lead Arrangers for the Green Loan.

While this is the Group’s first green loan, Soilbuild has long adopted sustainability as its operational building agenda since its first Green Mark Platinum project, Solaris @ one-north, which was completed in 2010.

Mr Lim Han Qin, Director of Soilbuild Group Holdings said: “The upcoming Solaris @ Tai Seng is our 3rd Green Mark Platinum building, reflecting our deep commitment towards embracing sustainability. We hope that the adoption of the green financing will further enunciate our commitment in this aspect and encourage more industrialists to embrace green buildings and sustainability.”

Mr Gary Tan, Head of ASEAN Commercial Real Estate, HSBC Singapore: “Being sustainable has historically been considered in the industry as a ‘nice to have’ but this deal shows that green finance is becoming an imperative for many Singapore companies. With MNCs, consumers, governments and investors turning their attention to sustainability, green loans are shifting the way in which businesses are viewed by their stakeholders. Soilbuild is demonstrating that its sustainability commitments are more than just words. We are delighted to continue our partnership with Soilbuild in its new chapter as Structuring Arranger of their Green Finance Framework and Joint Arrangers of their first green loan.”

Mr Linus Goh, Head of Global Commercial Banking, OCBC Bank: “We are proud to arrange Soilbuild‘s first green loan, marking an important milestone in the group’s sustainability journey. Having supported their first green mark project, Solaris @ one-north, and observed their commitment to sustainability over the past decade, we are confident Soilbuild will continue to lead the way for the industry in the shift towards green developments and financing.”

The upcoming Solaris @ Tai Seng is a multiple user hi-tech business space slated to complete in 2022. It comprises 4 main blocks of 8 and 9-storey business units, integrated with supporting food and beverages, ancillary retail units and recreational amenities, as well as generous provision of communal spaces for place making opportunities, and as a response to its location within the lifestyle business space hub of Paya Lebar iPark. The property’s green features include multiple rooftop gardens and corner sky terraces, allowing a rich biodiversity while providing open spaces for tenants to interact with nature.

In addition to secured bicycle parking lots with end-of-trip and shower facilities to encourage green commuting, Solaris @ Tai Seng will also be adopting various smart technologies such as the installation of photocell sensors for detection of intensity of light, volatile organic compounds (VOC) sensors to measure indoor air quality and carbon dioxide (CO2) levels, an integrated security access and lift destination control system to enhance building security and streamline human traffic and a dedicated building management system for efficient and effective building operation and maintenance.

The adoption of design for manufacturing and assembly (DfMA) concept in the construction of the Project will also allow the Group to build smartly by using modular construction methodologies such as prefabricated mechanical, electrical and plumbing (MEP) systems, which will greatly enhance productivity of construction and reduce the cycle time for installation of the requisite MEP components.

Appendix

Soilbuild: Solaris @ one-north
The development boasts of a 1.5km long spiral landscaped terrace that winds from the basement of the development to the roof-top, bringing nature from the ground up to every level. To further enhance sustainability, the building is equipped with an extensive rainwater harvesting system in which rainwater is collected by the pipes running down the exterior landscaped ramps and roofs by siphonic drainage for the irrigation of the green spaces. Solaris @ one-north has won numerous awards including the RIBA (Royal Institute of British Architects) - International Award Winner 2012, Singapore Institute of Architects & Singapore National Parks (SIA-NParks) First prize in Skyrise Greenery Awards, The Chicago Athenaeum: Museum of Architect and Design - The Green Good Design 2010 and the prestigious FIABCI World Prix d/Excellence Awards World Gold Winner in the sustainable development category in 2016.

Soilbuild: Solaris @ Kallang 164
The Group’s second development to obtain Green Mark Platinum was Solaris @ Kallang 164 which obtained its Temporary Occupation Permit earlier this year. Solaris @ Kallang 164 comprises two 9-storey high-specifications business space nestled within the upcoming Kallang River rejuvenation area. The building features extensive lush greenery, landscaping, rooftop gardens and open communal spaces. As part of reducing carbon emission, end-of-trip facilities that include secured bicycle parking and changing rooms with shower facilities are provided.

HSBC: Sustainability Credentials
The transaction marks the latest in a string of green loans executed by HSBC Singapore, including Singapore’s first Green Loan under LMA Green Loan Principles for Ho Bee Land and Ireland’s First Green loan under LMA Green Loan Principles for Oxley.

HSBC was named World’s Best Bank for Sustainable Finance and Asia’s Best Bank for Sustainable Finance by Euromoney Awards for Excellence 2019², of which two of the six green loan deals cited in the award submission for the former were executed by HSBC Singapore Commercial Banking.

OCBC: Sustainability Credentials
OCBC Bank was most recently joint Green Loan Mandated Lead Arrangers, Green Loan Advisor, Facility Agent and Security Agent for Sun Venture’s first green club loan, and was involved in the successful conversion of United Engineers’ SGD333 million loan into one of the first green loans for a residential property in Singapore. The bank also actively supports renewable energy projects, financing more than 20 solar farms in Malaysia. In Australia, the bank has shown its support for wind farms as the Mandated Lead Arranger of a A$502 million term loan facility to Wind Macarthur Finco Pty Limited. 

Green Loan Principles
To comply with the Green Loan Principles, companies could develop and publically publish a “Framework” setting out their intention to raise Green Loans, how these loans will meet the four pillars of the Green Loan Principles, and how they will obtain an external review to verify that their actions match their claims. 

On 21 March 2018 the Loan Market Association and the Asia Pacific Loan Market Association jointly issued the Green Loan Principles to formalise what constitutes a green loan. These set out 4 key criteria that a Green Loan should adopt being:

1. Use of Proceeds: that the loan is exclusively used for green projects and that the environmental benefits, which will be assessed and reported, are articulated in the finance documents
2. Project Selection and Evaluation: The development of a company framework stating the borrower’s environmental sustainability objectives; the process to determine how projects fit within the eligible categories set; and how they will identify and manage environmental risks associated with proposed projects that they wish to seek green funding. Borrowers are also encouraged to disclose any green standards or certifications
3. Management of Proceeds: The proceeds of a green loan should be credited to a dedicated account otherwise tracked by the borrower in an appropriate manner; and establish internal governance process for the tracking of funds towards designated green projects
4. Reporting: Borrowers will articulate how they maintain in real-time information on the use of proceeds for all green projects under finance including the amounts allocated and their expected impact.

¹ https://www.lma.eu.com/application/files/9115/4452/5458/741_LM_Green_Loan_Principles_Booklet_V8.pdf

² https://www.hsbc.com/news-and-insight/2019/hsbc-named-best-for-sustainable-finance