South Africa’s Redefine Properties Achieves Success With Green Bond Offering

Redefine Properties, a leading South African Real Estate Investment Trust (REIT), has issued another green bond as it leverages its sustainability journey.

Redefine will use the money raised to refinance eligible green assets (across its property portfolio) that align with the group’s overarching, long-term climate-resilient framework. The assets include highly rated green buildings that incorporate a variety of initiatives aimed at improving their energy and water efficiency.

Redefine’s third green bond was oversubscribed 1.9 times with R1.9 billion received in bids at an auction on 21 August and resulted in an upsized allocation to ZAR1.0 billion across three, five and seven years.

“Demand for the bond issuance was particularly high in the seven-year tenor, resulting in the allocation of ZAR425 million to that tranche, which bodes well for our long-term funding structure,” says Ntobeko Nyawo, Chief financial officer of Redefine. “South Africa’s debt capital market is experiencing a recovery in demand for high-quality commercial instruments with an environmental, social and governance (ESG) underpin.”

This green bond will further support the long-term decarbonisation of Redefine’s buildings, which is focused primarily on the reduction of energy consumption through efficiency interventions, mutual collaboration with tenants, and solar photovoltaic (PV) expansion.

“This latest green bond issue further improves our funding match between our assets and liabilities in our capital structure and reaffirms our commitment to placing ESG at the heart of what we do,” Nyawo says. “We believe that this will continue to play a critical role in strengthening and solidifying our balance sheet.”

The capital raised will be deployed in the refinancing of qualifying buildings that have achieved a 4 Star Green Star (or higher) rating from the Green Building Council South Africa (GBCSA), which is a tool used to rate the environmental impact and sustainability-related performance of buildings.

The green bond aligns with Redefine’s sustainability goal to further transform its properties into environmentally sustainable and resource-efficient assets.

The green bond also aligns with the International Capital Market Association Green Bond Principles. It was listed on the JSE in the Sustainability Segment – a platform for companies to raise debt for green, social and sustainable initiatives.

Nyawo adds that Redefine will continue its strategic participation in South Africa’s deep and liquid debt capital market, as it provides the opportunity to raise competitive funding that will enable the group to achieve its mission as it aims to deliver the smartest and most sustainable spaces the world has ever known.