Mindspace Business Parks, owner and developer of a quality Grade A office portfolio, announced its Rs 6.5 billion sustainability-linked bond issuance, which was placed with the International Finance Corporation (IFC), the private sector arm of the World Bank group, on June 25, 2024. The bond’s coupon is linked to Mindspace’s commitment to achieving certain environmental, social and governance targets towards building a greener ecosystem.
These bonds are issued for a tenor of seven years and have been rated ICRA AAA (Stable) by ICRA Limited. Shardul Amarchand Mangaldas and Company served as the legal counsel of the issuer for this transaction.
Mindspace real estate investment trust (REIT) has undertaken certain ESG targets critical to its operations. These include reducing greenhouse gas emissions (Scope 1, 2 and 3), increasing the share of green-certified areas for existing buildings (under operations and maintenance) and reducing energy intensity. The coupon of these bonds is fixed in nature, and will be stepped down in a staggered manner based on achievement of the set targets.
Mindspace REIT has put in place its maiden sustainability-linked financing framework, under which Mindspace REIT and/or its special purpose vehicles can undertake issuances of sustainability-linked instruments. The framework is based on five key components, which include the selection of key performance indicators, calibration of sustainability performance targets, sustainability-
linked instrument characteristics, reporting and verification.
Bureau Veritas, a “business-to-business-to-society” services company and a world leader in sustainability services, provided a second party opinion on the framework, confirming its alignment with sustainability-linked bond principles. It was issued by the International Capital Markets Association and Sustainability Linked Loan Principles and published by the Loan Market Association. Bureau Veritas also concluded that the sustainability performance targets are ambitious, meaningful and relevant in the context of Mindspace REIT’s broader sustainability and business strategy,
representing a material improvement over a predefined timeline.
Ramesh Nair, CEO, Mindspace Business Parks REIT, commented, “We are thrilled to announce another significant milestone in our sustainability journey as we become the first Indian REIT to issue sustainability-linked bonds. International Finance Corporation fully subscribed to this issuance. This follows our maiden green bond issue in March 2023. Post this issuance, our cumulative green/sustainability-linked financing now stands at Rs 18.6 billion, strengthening our commitment to responsible growth. Our purpose to build sustainable ecosystems helps us create long-term value for stakeholders, blending financial success with the environmental and social benefits.”
“We are pleased to partner with Mindspace REIT for its maiden sustainability-linked bond,” said Wendy Werner, IFC country head for India. “IFC’s investment will help Mindspace enhance the sustainability of its portfolio of business parks and reduce greenhouse gas emissions year on year. This partnership aligns with India’s net zero ambitions and demonstrates the viability of climate finance in the real estate sector. Our support aims to attract more diverse and long-term funding at a time when private
capital is critical to build a greener, more resilient future.”