Our Strategy / Sustainable Finance

Sustainable Finance

NWD was one of the first movers in sustainable financing in Hong Kong. We are committed to continuing our efforts to develop sustainable financing practices in the region. In line with international standards and guidelines, we actively leverage financing opportunities to achieve our sustainability goals, whilst closely assessing and reporting on the impact we deliver.


Sustainable Finance Framework

In reference to the Green Bond Principles 2018 and Green Loan Principles 2018, the New World Development Green Finance Framework, established in September 2018, outlines the eligibility criteria of green projects and how we manage and report the use of proceeds. Several green bonds and green loans have been raised successfully under the framework. A Second-Party Opinion was obtained from Sustainalytics.

TheNew World Development Sustainable Finance Framework was established in 2020 to expand the scope of our Green Finance Framework. This framework references the Green Bond Principles 2018, Green Loan Principles 2018, Social Bond Principles 2020, and Sustainability Bond Guidelines 2018. It outlines the eligibility criteria of green and social projects and how we manage and report the use of proceeds. A Second-Party Opinion was obtained from Sustainalytics.

The New World Development Sustainable Finance Framework has been updated in 2022 to stay up-to-date with evolving international standards and best practice. This framework aligns with the Green Bond Principles 2021, Social Bond Principles 2021, Sustainability Bond Guidelines 2021, Green Loan Principles 2021 and Social Loan Principles 2021. A Second-Party Opinion was obtained from Sustainalytics.

The New World Development Sustainable Finance Framework was last updated in July 2022. A Second-Party Opinion was obtained from Sustainalytics.


Green Bond

Our green bond issuance is a testament to our commitment to deliver quality for customers and create value for our stakeholders by developing more green and healthy buildings.

In December 2018, the Group issued its first green bond under New World China Land’s medium-term note programme. The bond raised US$310 million at a coupon rate of 4.75% due in 2023.

The bond received Green Finance Certificates (Pre-issuance Stage and Post-issuance Stage) from Hong Kong Quality Assurance Agency (HKQAA) and the “Best Green Bond — Real Estate (Asia-Pacific Region)” award by The Asset, an international financial magazine. The bond is currently listed on STAGE, HKEx’s Sustainable & Green Exchange.

Continuing on our commitment to foster the development of green buildings in Hong Kong, New World Development issued another two green bonds in March 2021 and April 2021, raising HK$550 million (coupon rate: 3.00%) due in 2028 and HK$780 million (coupon rate: 3.95%) due in 2031. All of the proceeds will be used to finance the development of our green building project, NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road), a Grade A office building near Cheung Shun Street.

As part of an ongoing commitment to our SV2030 and ESG integration, in June 2022, NWD became the first corporate in the world to issue a USD-denominated social and green dual tranche offering in the public bond markets. With this transaction, NWD also became the first non-financial corporate in Asia to issue a USD-denominated Social bond in the public bond markets, as well as the first corporate in Greater China to issue a USD-denominated Green Perpetual in the public bond markets. The 5-year US$200 million Social bond (coupon rate: 5.875%), priced at T+290 basis points, and US$500 million Green perpetual bond (couple rate: 6.15%) were oversubscribed by nearly 5 times at its peak, with strong participation from over 100 quality investors on each tranche, including renowned fund managers, asset managers and private banks.

As at 30 June 2023, a total of two green bonds in USD and two green bonds in HKD were raised.

Allocation of December 2018 Green Bond Proceeds

Category
Projects
Proceeds Allocated
Green Buildings
New World Canton Centre, The New Canton Mansion
US$207.7 million (67%)
Green Buildings
Qianhai CTF Finance Tower
US$102.3 million (33%)
Category
Green Buildings
Projects
New World Canton Centre, The New Canton Mansion
Proceeds Allocated
US$207.7 million (67%)
Category
Green Buildings
Projects
Qianhai CTF Finance Tower
Proceeds Allocated
US$102.3 million (33%)

Allocation of March 2021 Green Bond Proceeds

Category
Project
Proceeds Allocated
Green Buildings
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
HK$550 million
Category
Green Buildings
Project
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
Proceeds Allocated
HK$550 million

Allocation of April 2021 Green Bond Proceeds

Category
Project
Proceeds Allocated
Green Buildings
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
HK$780 million
Category
Green Buildings
Project
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
Proceeds Allocated
HK$780 million

Allocation of June 2022 Green Perpetual Bond Proceeds

Category
Project
Proceeds Allocated
Green Buildings
PORTAS (formerly known as King Lam Street Development)
US$500 million
Category
Green Buildings
Project
PORTAS (formerly known as King Lam Street Development)
Proceeds Allocated
US$500 million

Location

Guangzhou, China


GFA

284,328 sq m


Nature

Office, retail, serviced apartments and hotel


Certifications

  • LEED v4 for Building Design and Construction: Core and Shell Development precertification Gold – Commercial portion (two office towers including retail, hotel and serviced apartments) obtained in November 2018

Highlight of Green Elements –

Energy Efficiency

  • Air handling units with variable frequency control
  • Demand control ventilation
  • Variable speed drive for all chilled water pumps
  • Pre-heat domestic hot water by the cooling tower condensate water (for hotel)
  • Air-side free cooling during cold season
  • Efficient chillers
  • Energy efficient lighting and control system

Energy Performance

Estimated annual energy savings exceeding LEED baseline performance# by 12% or more


Highlights of Green Elements –

Sustainable Water and Wastewater Management

  • Wastewater recycling for toilet flushing in the self-owned office, co-working space and serviced apartments
  • 100% low-flow sanitary fixtures
  • Rainwater harvesting for irrigation and basement carpark area washing
  • Water-efficient sprinkler irrigation system

Water Efficiency and Savings

Estimated annual potable water savings exceeding LEED baseline performance by over 40%


# Using ASHRAE 90.1-2010 as baseline (LEED v4 Building Design and Construction: Core and Shell Development)

Location

Shenzhen, China


GFA

176,300 sq m


Nature

Office and retail


Certifications

  • LEED 2009 for Building Design and Construction: Core and Shell Development precertification Gold — North Tower and South Tower obtained in October 2018
  • WELL v1 PrecertifiedTM Gold — North Tower plus Retail Podium obtained in November 2018

Highlight of Green Elements –

Energy Efficiency

  • Air handling units with variable frequency control
  • Demand control ventilation
  • Variable speed drive for chilled water pumps
  • Energy efficient radiant chilled ceiling/beam systems (South Tower)
  • Air-side free cooling during cold season
  • Energy efficient lighting and control system

Energy Performance

Estimated annual energy savings exceeding LEED baseline performance# by 18% or more.


Highlights of Green Elements –

Sustainable Water and Wastewater Management

  • City greywater for flushing and irrigation use
  • Harvest rainwater and air conditioning system condensate for recycling use
  • 100% low-flow sanitary fixtures
  • Water efficient irrigation system with humidity sensor control

Water Efficiency and Savings 

Estimated annual potable water savings exceeding LEED baseline performance by over 45%


Using ASHRAE 90.1-2007 as baseline (LEED 2009 Building Design and Construction: Core and Shell Development).

Location
Hong Kong


GFA
529,185 sq ft


Nature
Office


Certifications

  • BEAM Plus New Buildings V1.2 Final Gold obtained in June 2023
  • LEED v4 for Building Design and Construction: Core and Shell Development Final Gold obtained in November 2023
  • WELL v1 PrecertifiedTM Platinum obtained in September 2023

Location
Hong Kong


GFA
998,210 sq ft


Nature
Office


Certifications

  • BEAM Plus New Buildings V1.2 Provisional Gold obtained in December 2019
  • LEED v4 for Building Design and Construction: Core and Shell Development precertification Gold obtained in June 2020
  • WELL v1 PrecertifiedTM Platinum obtained in June 2020

Green Loan

In March 2018, New World Group secured Hong Kong’s first-ever green loan to refinance the costs of K11 ATELIER King’s Road’s development. The green loan received the Green Finance Certificate (Pre-issuance Stage) from HKQAA. Terms were renegotiated in December 2019, resulting in an increased loan size from HK$3.6 billion to HK$5.0 billion, with a five-year term.

In March 2021, NWD secured a three-year green loan of HK$300 million to refinance partial costs for the development of NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road), a Grade A office building near Cheung Shun Street.

In May 2021, NWD secured a five-year green loan for the development of the Wing Hong Street project*, capturing HK$1.4 billion for cost recapitalisation.

In December 2021 and March 2022, NWD further secured two more 5-year green loans for the development of both NCB Innovation Centre and 11 SKIES, with a total of HK$6.5 billion.

In May 2022, NWD secured a green loan for the development of PORTAS (formerly known as King Lam Street Development).

Two green loans were issued in October 2022 and May 2023 with proceeds allocated to 11 SKIES, and one green loan was issued in April 2023 with proceeds allocated to Wing Hong Street project*.

Allocation of 2018 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
K11 ATELIER King’s Road
HK$4 billion
Green Buildings
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
HK$1 billion
Category
Green Buildings
Project
K11 ATELIER King’s Road
Amount Utilised
HK$4 billion
Category
Green Buildings
Project
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
Amount Utilised
HK$1 billion

Allocation of March 2021 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
HK$300 million
Category
Green Buildings
Project
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
Amount Utilised
HK$300 million

Allocation of May 2021 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
Wing Hong Street project, Cheung Sha Wan*
HK$1.4 billion
Category
Green Buildings
Project
Wing Hong Street project, Cheung Sha Wan*
Amount Utilised
HK$1.4 billion

Allocation of December 2021 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
HK$1 billion
Green Buildings
11 SKIES
HK$5 billion
Category
Green Buildings
Project
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
Amount Utilised
HK$1 billion
Category
Green Buildings
Project
11 SKIES
Amount Utilised
HK$5 billion

Allocation of March 2022 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
HK$27 million
Green Buildings
11 SKIES
HK$473 million
Category
Green Buildings
Project
NCB Innovation Centre (formerly known as 888 Lai Chi Kok Road)
Amount Utilised
HK$27 million
Category
Green Buildings
Project
11 SKIES
Amount Utilised
HK$473 million

Allocation of May 2022 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
PORTAS (formerly known as King Lam Street Development)
HK$5.7 billion
Category
Green Buildings
Project
PORTAS (formerly known as King Lam Street Development)
Amount Utilised
HK$5.7 billion

Allocation of October 2022 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
11 SKIES
HK$300 million
Category
Green Buildings
Project
11 SKIES
Amount Utilised
HK$300 million

Allocation of April 2023 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
Wing Hong Street project, Cheung Sha Wan*
HK$500 million
Category
Green Buildings
Project
Wing Hong Street project, Cheung Sha Wan*
Amount Utilised
HK$500 million

Allocation of May 2023 Green Loan Proceeds

Category
Project
Amount Utilised
Green Buildings
11 SKIES
HK$4 billion
Category
Green Buildings
Project
11 SKIES
Amount Utilised
HK$4 billion

Location

Hong Kong


GFA

487,504 sq ft


Nature

Office


Certifications

  • BEAM Plus New Buildings V1.2 Final Platinum obtained in January 2021
  • LEED 2009 Platinum® obtained in August 2019
  • WELL v1 CertifiedTM Platinum obtained in December 2019

Location
Hong Kong


GFA
529,185 sq ft


Nature
Office


Certifications

  • BEAM Plus New Buildings V1.2 Final Gold obtained in June 2023
  • LEED v4 for Building Design and Construction: Core and Shell Development Final Gold obtained in November 2023
  • WELL v1 PrecertifiedTM Platinum obtained in September 2023

Location
Hong Kong


GFA
363,392 sq ft


Nature
Office


Certifications

  • BEAM Plus New Buildings V1.2 Provisional Gold obtained in June 2020
  • LEED v4 for Building Design and Construction: Core and Shell Development precertification Gold obtained in August 2020
  • WELL v1 PrecertifiedTM Platinum obtained in July 2020

Location
Hong Kong


GFA
3,767,400 sq ft


Nature
Mixed-use development


Certifications

    11 SKIES (retail portion)

  • BEAM Plus New Buildings V1.2 Provisional Gold obtained in July 2021
  • LEED v4 for Building Design and Construction: Core and Shell Development precertification Gold obtained in January 2020
  • WELL v1 PrecertifiedTM Gold obtained in November 2019
  • K11 ATELIER 11 SKIES

  • BEAM Plus New Buildings V1.2 Final Platinum obtained in April 2023
  • LEED v4 for Building Design and Construction: Core and Shell Development precertification Platinum obtained in January 2020
  • WELL v1 CertifiedTM Platinum obtained in December 2022

Location
Hong Kong


GFA
998,210 sq ft


Nature
Office


Certifications

  • BEAM Plus New Buildings V1.2 Provisional Gold obtained in December 2019
  • LEED v4 for Building Design and Construction: Core and Shell Development precertification Gold obtained in June 2020
  • WELL v1 PrecertifiedTM Platinum obtained in June 2020

Social Financing

Echoing NWD’s SV2030 commitment and our corporate mission to create shared value, in June 2022, we issued the world’s first USD-denominated social and green dual tranche offering in the public bond markets, consisting of a 5-year US$200 million Social bond (coupon rate: 5.875%), priced at T+290 basis points, and US$500 million Green perpetual bond (coupon rate: 6.15%). The social bond is also Asia’s first USD-denominated social bond issued by a non-financial corporate. It demonstrates our commitment to creating shared value for stakeholders. As at 30 June 2023, proceeds from this social bond have yet to be allocated.

In November 2022, we issued our first social loan with proceeds allocated to Kai Tak Sports Park (“KTSP”), the largest sports infrastructure project ever undertaken in Hong Kong. The three-year, revolving trade facility of up to HK$800 million loan supports the development of the 28-hectare sports and entertainment precinct, which will include recreation, retail, wellness and community spaces that enhance sports participation and social inclusion when completed. Loan proceeds may fund the construction, development, and refurbishment of KTSP’s public sports ground and neighbourhood park, as well as facilities with hiring charges such as badminton and basketball courts. This social loan has obtained external pre-issuance review to assess the loan’s compliance with the criteria of our Sustainable Finance Framework.

Allocation of November 2022 Social Loan Proceeds

Category
Project
Amount Allocated*
Access to Basic Infrastructure and Essential Services
Kai Tak Sports Park
HK$311.9 million
Category
Access to Basic Infrastructure and Essential Services
Project
Kai Tak Sports Park
Amount Allocated*
HK$311.9 million

*Allocated amount as at 30 June 2023.


Post-Issuance Verification

During FY2023, we conducted our first external post issuance limited assurance on proceeds allocated to eligible green and social projects via active green and social bonds and loans as at 30 June 2023. The limited assurance report can be found in the Downloads section of the “Performance & Reporting” tab.


Sustainability-Linked Loan

In November 2019, NWD raised the Group’s first sustainability-linked loan (SLL) from DBS Bank Hong Kong. This five-year loan of HK$1 billion has equal tranches of term loan and revolving loan. Proceeds will fund measures to drive long-term sustainability targets, enhance the climate resilience of our property portfolio, as well as general corporate financing. The Group will benefit from discounted interest rates when pre-determined sustainability milestones are achieved, including NWD’s environmental impact reduction targets (refer to the latest annual report for more) which form part of the Group-wide SV2030 targets, as well as key performance indicators (KPIs) ranked annually by GRESB. This loan is the first in Asia to link with GRESB performance.

In November 2020, NWD and DBS Bank Hong Kong completed Hong Kong’s first-ever interest rate swap linked to the United Nations Sustainable Development Goals (UN SDGs). This derivative transaction is designed to provide a hedge against the interest rate risk related to NWD’s 5-year HK$1 billion SLL from DBS, which closed in November 2019. Under this innovative solution, NWD is eligible to receive sponsorship from DBS to support social innovation projects, if NWD successfully generate at least eight business-to-business integration opportunities that contribute to the UNSDGs adopted by SV2030. As of 30 June 2021, NWD successfully surpassed this target.

In December 2020, referencing the same set of sustainability targets and KPIs from the first SLL, NWD raised its second SLL from Bank of China (Hong Kong). This five-year loan of HK$2 billion consists of a HK$1.5 billion term loan and a HK$500 million revolving loan. Proceeds will finance the general working capital of the Group.

In June 2021, NWD issued a SLL, consisting of 7-year JP¥13.5 billion and 5-year HK$1.15 billion term loan facilities. And in September 2021, NWD issued a 3-year SLL of HK$500 million. These two loans are linked to our performance on the S&P Global Corporate Sustainability Assessment (CSA).

In April 2022, echoing with NWD’s SV2030 commitment, NWD issued a 3-year HK$1 billion SLL, linked to selected environmental impact reduction targets and our performance on the S&P Global CSA.

In June 2022, NWD further issued a 3-year HK$500 million SLL, linked to our performance on the S&P Global CSA.

In July 2022, NWD issued a 3-year HK$4.11 billion SLL, linked to selected environmental impact reduction targets, S&P CSA performance, and CSV Lease adoption.

In February 2023, NWD further issued a 5-year HK$2 billion SLL, linked to S&P CSA performance and CSV Lease adoption.


Sustainability-Linked Bond Framework (2021)

In accordance with the International Capital Market Association (ICMA) 2020 Sustainability-Linked Bond Principles, NWD has developed a Sustainability-Linked Bond (SLB) Framework. NWD understands that by supporting climate change mitigation through the extensive adoption of renewables, it can assume a catalytic role in addressing the climate crisis. We hope our issuances will generate momentum for sustainable development in Greater China and inspire other similar companies to join our ranks.

A Second-Party Opinion was obtained from Sustainalytics.

In early January 2021, NWD reached a new milestone in sustainable finance by becoming the first real estate developer in the world to issue a USD-denominated SLB. The bond was 6 times oversubscribed by international ESG investors at its peak and achieved the lowest yield yet for a public USD bond offering by NWD. The 10-year US$200 million bond (coupon rate: 3.75%) has a Sustainability Performance Target that is aligned with NWD’s latest Renewable Energy Roadmap, which commits to achieving 100% Renewable Energy for NWD’s Greater Bay Area rental properties by FY-end 2025/26. Should NWD fail to achieve the target, the Group will purchase carbon offsets in an equivalent amount to 25 basis points per annum for the remaining life of the bond. This forms part of NWD’s ongoing commitment to ESG integration and to support further decarbonisation within its property business beyond SV2030 targets. In view of overwhelming investor interest, NWD priced an additional HK$1.5 billion SLB in February 2021, a 10-year private placement (coupon rate: 3.5%) and the world’s first HKD-denominated SLB.

Proceeds of the bonds will be allocated to NWD’s long-term sustainability initiatives, as well as general corporate purposes.


*The project names are subject to finalisation before official opening.
 

Transactions last updated in October 2023