Mindspace REIT becomes the First Indian REIT to issue Sustainability Linked Bond, raising INR 650 Crore from International Finance Corporation

Bengaluru, June 25, 2024: Mindspace Business Parks REIT (BSE: 543217 | NSE: MINDSPACE) (‘Mindspace REIT’), owner and developer of quality Grade A office portfolio announces its INR 650 Crore (6.5Bn) Sustainability Linked Bond Issuance that has been placed with International Finance Corporation (IFC), the private sector arm of the World Bank Group. The coupon of the bond is linked to Mindspace’s commitment to achieve certain ESG targets towards building a greener eco-system.

Issue Details

These bonds are issued for a tenure of 7 years. This issuance has been rated [ICRA] AAA(Stable) by ICRA Ltd. Shardul Amarchand Mangaldas & Co served as the legal counsel of the Issuer for this transaction.

The ESG Targets

Mindspace REIT has undertaken certain ESG targets critical to its operations. These include reduction in GHG emissions (Scope 1, 2 and 3), increasing the share of green certified area for existing buildings (under operations and maintenance), and reduction in energy intensity. The coupon of these bonds is fixed in nature, and shall be stepped down, in a staggered manner, basis achievement of the set targets.

Sustainability Linked Financing Framework

Mindspace REIT has put into place its maiden sustainability-linked financing framework under which Mindspace REIT and/or its SPVs can undertake issuances of sustainability linked instruments. The framework is based on five key components: 1) Selection of KPIs 2) Calibration of Sustainability Performance Targets 3) Sustainability-Linked Instrument Characteristics 4) Reporting and 5) Verification.

Second Party Opinion Provided by Bureau Veritas

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 (SLBPs), issued by the International Capital Markets Association and Sustainability Linked Loan Principles (SLLP) published by the Loan Market Association (LMA). 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.

Mr. Ramesh Nair, CEO, Mindspace Business Parks REIT, said, “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 INR 18.6 billion[1], 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.”

The Financing Framework and the Second Party Opinions are available on Mindspace REIT’s website: https://www.mindspacereit.com/investor-relations/debt-sustainability-linked-financing#ir