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.

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 issuance will generate momentum for sustainable development in Greater China and inspire other similar companies to join our ranks.

Second-Party Opinion was obtained from Sustainalytics.

In early January, NWD reached a new milestone in sustainable finance by becoming the first real estate developer in the world to issue a USD 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 USD200 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 HKD1.5 bn SLB in late January, 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.


Sustainable Finance Framework

The New World Development Sustainable Finance Framework is 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.

Second-Party Opinion was obtained from Sustainalytics.


Green 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. Under the framework, the Group has successfully raised a green bond and two green loans.

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.

Allocation of Green Bond Proceeds

Category
Projects
Proceeds Allocated
Green Buildings
New World Zengcheng Comprehensive Development Project*
US$206.4 million (67%)^
Green Buildings
Qianhai CTF Finance Tower*
US$101.7 million (33%)^
Category
Green Buildings
Projects
New World Zengcheng Comprehensive Development Project*
Proceeds Allocated
US$206.4 million (67%)^
Category
Green Buildings
Projects
Qianhai CTF Finance Tower*
Proceeds Allocated
US$101.7 million (33%)^

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

^ Total net proceeds received are US$308.1 million out of the US$310 million green bond.

Location

Guangzhou, China


GFA

284,328 sq m


Nature

Office, retail, serviced apartments and hotel


Funding Transaction (FY2020)

Aggregated amount of proceeds earmarked: US$194.2 million

Remaining balance: US$12.2 million


Certifications

  • China Green Building Evaluation Standard — Certificate of Green Building Design Label “Two-Star” obtained for the whole project in December 2019
  • LEED® 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


Funding Transaction (FY2020)

Aggregated amount of proceeds earmarked: US$96.0 million

Remaining balance: US$5.7 million


Certifications

  • China Green Building Evaluation Standard — Certificate of Green Building Design Label “Three-Star” obtained for the whole project in June 2020
  • LEED® for Building Design and Construction: Core and Shell Development precertification Gold — South Tower and North Tower plus Retail Podium obtained in October 2018
  • WELL 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 v2009 Building Design and Construction: Core and Shell Development).


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 period.

An additional three-year green loan of HK$500 million was obtained in May 2020. This refinances partial costs for the development of green building projects, including a Grade A office building at Cheung Shun Street.

Allocation of NWD’s Green Loan (2018)

Category
Project
Amount Utilised
Green Buildings
K11 ATELIER King’s Road
HK$2.5 billion
Category
Green Buildings
Project
K11 ATELIER King’s Road
Amount Utilised
HK$2.5 billion

Location

Hong Kong


GFA

487,504 sq ft


Nature

Office


Certifications

  • BEAM Plus New Buildings V1.2 Provisional Platinum obtained in September 2016
  • LEED Platinum® obtained in August 2019
  • WELL CertifiedTM Platinum obtained in December 2019

Allocation of NWD’s Green Loan (2020)

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

*The project name is subject to finalisation before official opening.

Location

Hong Kong


GFA

529,185 sq ft


Nature

Office


Certifications

  • BEAM Plus New Buildings V1.2 Provisional Gold obtained in February 2019
  • LEED® for Building Design and Construction: Core and Shell Development precertification Gold obtained in January 2019
  • WELL PrecertifiedTM Platinum obtained in April 2019

Sustainability-Linked Loan

In November 2019, New World Development raised the Group’s first sustainability-linked loan 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 December 2020, referencing the same set of sustainability targets and KPIs, NWD raised its second sustainability-linked loan 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 2020, NWS also announced its first sustainability-linked loan with Crédit Agricole Corporate and Investment Bank to advance the Group’s annual sustainability improvement targets.