Growthpoint lists R1.1 billion in JSE’s new Green Bond Segment – a first for corporate SA

By Suren Naidoo

South Africa’s largest primary Real Estate Investment Trust (REIT) – the JSE Top40 Index company Growthpoint Properties – became the first corporate in the country to list Green Bonds on the JSE this morning.

Growthpoint’s R1.1 billion in Green Bonds were the first to list on the JSE’s Green Bond Segment, marking another major milestone for green building and environmental sustainability in the listed property sector in South Africa.

“The JSE is proud to welcome Growthpoint to the Green Bond Segment, but also importantly for being the first corporate in South Africa to issue a green bond,” said Prejelin Naggan, head of Primary Markets at the JSE.

“Growthpoint’s successful inaugural green bond has proved there are benefits in committing to the promotion of South Africa’s climate resilient future as well as for being at the forefront of the financial sector’s response to the investment challenges posed by climate change,” he added.

Celebrating the listing of Growthpoint Properties’ Green Bonds on the JSE on 25 April 2018, were executives and senior managers of Growthpoint, seen from left, Bushang Seroka, Lauren Turner, Gerald Völkel, Dirkje Bouma, Norbert Sasse, Natalie van der Bijl, and Estienne de Klerk. Growthpoint became the first corporate in the country to list on the JSE’s new Green Bond Segment.

Speaking to SA Property Insider, CEO of Growthpoint South Africa Estienne de Klerk said: “Growthpoint has been at the forefront of green building and corporate sustainability in South Africa, and the listing of our Green Bonds on the JSE extends our commitment.”

De Klerk added: “This is an exciting milestone for all involved. The launch of our Green Bonds has further diversified Growthpoint’s sources of funding by linking our sustainable developments and green buildings with capital markets. They have been well received by local and international investors and we are pleased with the results. Growthpoint will continue to drive green development and a sustainable property sector.”

The JSE’s Green Bond Segment was launched in October last year and it provides a platform for companies, and other institutions, to raise funds that are ring-fenced for low carbon initiatives and for investors to invest in securities that are truly green.

According to Growthpoint, the R1.1 billion ($94 million) in Green Bonds it has issued will be used to refinance funding for the green office buildings in the new Growthpoint THRIVE Portfolio and specifically the THRIVE Platinum Portfolio, which includes its top green-rated office properties. Buildings in this portfolio have a South African Property Owners Association (SAPOA) Premium- or A-grade rating as well as a Green Building Council of South Africa (GBCSA) Green Star SA rating of Four Stars or higher (design, as-built or existing building performance).

In addition, suitable industrial and retail properties with Four-Star Green Star ratings or higher will also be eligible. Environmental projects related to Growthpoint’s buildings that have positive environmental impacts, such as solar energy projects, will also qualify for Green Bond funds. Growthpoint is a leader in green building and climate mitigation, with over 86 of its properties being green-certified and having a combined value of R18.7 billion.

Naggan said: “Growthpoint is laying new foundations for the capital flows needed to achieve the commitments within the South African context for securing investments and jobs in the future. Together with the emergence of other corporate green bond issuers we are confident that this will make a leading contribution to developing green bond markets, creating new and innovative climate finance solutions. Growthpoint should be greatly congratulated for being at the forefront of this.”

Meanwhile, the GBCSA hailed Growthpoint’s Green Bonds listing. @GBCSA tweeted: “Growthpoint holds the highest portfolio of green star rated buildings & has become one of the leading REITS who has put sustainability in the forefront. The @GBCSA applauds @Growthpoint’s groundbreaking issue of a green bond. The 1st of many more to come within the property sector.”

Among the investors in the new Growthpoint Green Bonds is the African Local Currency Bond Fund (ALCB Fund), an initiative of KfW Development Bank and the German Government backed by additional investors. It aims to promote the development of African capital markets by acting as an anchor investor in primary bond issuance.

The JSE is one of the top 20 stock exchanges in the world in terms of market capitalisation. As South Africa’s largest primary REIT listed on the JSE, Growthpoint is a burgeoning international property company and owns and manages a diversified portfolio of 559 property assets, locally and internationally.

Growthpoint is a Founding Member of GBCSA, a member of the GBCSA’s Green Building Leader Network, a component of the FTSE4Good Emerging Index and has been included in the FTSE/JSE Responsible Investment Index for eight years running. It owns and co-owns the largest portfolio of certified green buildings of any company in South Africa and is recognised as a leading developer of green buildings.