Philippines: ALI Pushes for Greener Real Estate Sector

Marking a first for the Philippine real estate sector, the funding package includes a P6 billion sustainability-linked bond and a P14.5 billion sustainability-linked loan

Real estate giant Ayala Land Inc. (ALI) reinforced its push for a greener property sector in the country after successfully raising P20.5 billion through its pioneering sustainability-linked financing programme. Marking a first for the Philippine real estate sector, the funding package includes a P6 billion sustainability-linked bond and a P14.5 billion sustainability-linked loan from the International Finance Corp. (IFC).

This landmark investment drives our efforts in portfolio decarbonization, reinforcing our commitment to a greener property sector in the Philippines.

Meean Dy, President and CEO, ALI 

ALI said the sustainability-linked financing program aligns the company’s financial commitments with its environmental targets. Aside from cementing its position as a sustainability leader in the real estate sector, ALI said the program also sets a precedent for future green financing initiatives in the Philippines. “This landmark investment drives our efforts in portfolio decarbonization, reinforcing our commitment to a greener property sector in the Philippines,” said Meean Dy, ALI President and CEO.

The company said the interest rates of the sustainability-linked bond and loan are linked to its performance on key sustainability metrics, including a 42 percent reduction in emissions from malls, offices and hotels by 2030 as well as achieving EDGE Zero Carbon certification for 1.5 million square meters of office properties by 2025.

According to ALI, failure to meet these targets will result in a five-basis point increase in interest rates for each unmet target, up to a total of 10 basis points. The P6 billion sustainability-linked bond in particular has a 10-year term and carries a coupon rate of 6.9931 percent per annum. Anchored by pension funds and institutional investors, it is the first-of-its-kind offered to the public in the Philippines. The P14.5 billion sustainability-linked loan provided by IFC, meanwhile, is ALI’s first loan from a multilateral agency and IFC’s first sustainability-linked loan for a Philippine corporate.

The loan, which will be drawn in up to four disbursements, supports its decarbonization efforts and green building initiatives. In particular, the funding will enable the company to implement energy and water-saving measures across its commercial real estate portfolio, including energy-efficient lighting and cooling systems, passive building design, low-flow water fixtures and water harvesting and recycling systems.

ALI has a diverse real estate portfolio composed of residential, office, commercial and industrial properties. It has more than 11,000 hectares of land bank and a solid track record in developing large-scale, integrated mixed-use and sustainable estates.