Sub-Saharan Africa's real estate sector boasts first green loan

MEDIA RELEASE

29 SEPTEMBER 2021

Equites Property Fund and RMB conclude the first green loan in the sub-Saharan African real estate sector

Equites Property Fund and RMB today announced that they successfully concluded the first green loan in the sub-Saharan African real estate sector. The facility will enable Equites to unlock ongoing environmental benefits. RMB acted as the sole arranger and sustainability agent for the R225m green loan.

Equites is the only specialist logistics Real Estate Investment Trust (REIT) listed on the JSE. It has global aspirations, with a footprint in South Africa and the UK. Sustainability is central to Equites’ real estate strategy. To further this vision, they required a green loan to fund the development of two high specification IFC EDGE (Excellence in Design for Greater Efficiencies) certified green buildings in an attractive industrial node, Equites Park Meadowview, for key tenants, Altron and Digistics.

Laila Razack, Chief Financial Officer for Equites, says: “Equites has been focussed on sustainability within the logistics sector for several years, in alignment with our dedication to offer our tenants high quality logistics assets that support both our tenants’ and our commitment to sustainability. The recognition by RMB of the sustainable build of our new high specification properties in Equites Park Meadowview for Altron and Digistics enables Equites to continue to meet our goal of ensuring all our new properties are certified to internationally recognised green building standards in both South Africa and the United Kingdom.”

Warren Douglas, Head of Treasury for Equites, adds: “Equites’ dedication to sustainability is a key focus of our organisation, and the opportunity provided by RMB to align our debt financing with our commitment to developing EDGE certified green buildings enables Equites to continue to achieve progress in our Sustainable Development Goals. Our sustainable construction of properties that provide energy, water and material efficiencies benefits our tenants through long-term savings, in line with our commitment to deploy capital in an environmentally responsible manner.”

Nigel Beck, Head Sustainable Finance and ESG for RMB says: “RMB is committed to structuring sustainable finance facilities that support positive environmental and social outcomes. With the provision of a green loan, we have assisted Equites’ long-term strategy and commitment to sustainability, including their EDGE certification.”

EDGE is a globally recognised certification which brings speed, market intelligence and an investment focus to green building certification in over 170 countries globally. The EDGE engine has a set of city-based climate and cost data, consumption patterns and algorithms for predicting the most accurate performance results. In South Africa, the SANS 10400-XA Building energy efficiency code was used as a baseline and all projects wishing to certify with EDGE are required to achieve a minimum of 20% above this standard in the categories of energy, water and embodied energy in building materials.

Beck adds: “The RMB Real Estate Investment Banking and Sustainable Finance and ESG Advisory teams worked closely together in structuring this green loan for Equites in compliance with the Loan Market Association’s Green Loan Principles. Equites have been rewarded for their green investment through a pricing benefit.”

Equites has met and, in some areas, exceeded the requirements for EDGE certification.  The design choices made for the Altron building predict energy savings of 39%, water savings of 21% and 55% less embodied energy. LED lighting and solar photovoltaics were installed to reduce the warehouse’s energy use, while dual-flush water closets and water-efficient faucets were installed to reduce the warehouse’s water use. The resource efficiency of the warehouse is a manifestation of Altron’s commitment to reduce the environmental impacts of its infrastructure. The Digistics buildings has achieved Preliminary EDGE certification. The design choices made for this project predict energy savings of 31%, water savings of 48% and embodied energy savings of 56%. The certified green buildings will also prove beneficial for tenants by providing long-term utilities savings.

By working together, Equites and RMB were able to unlock an innovative and sustainable solution through funding EDGE certified green buildings which assists Equites to execute its sustainability strategy.

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Contact:

Kate Kelly l Rand Merchant Bank l kate.kelly@rmb.co.za