JSE-listed real estate investment trust (Reit) Redefine has raised R1 billion in its latest green bond issuance.

The property owner informed investors that it will use the money raised to refinance qualifying buildings that at least have a four-star green building certification. Buildings will also need to align with the group’s “over-arching, long-term climate resilient framework”, it said.

According to Redefine, this third green bond – auctioned earlier this month – was oversubscribed 1.9 times, receiving R1.9 billion in bids, resulting in an upsize allocation to R1 billion across the 3, 5 and 7 years, with the latter attracting much of the attention.

“Demand for the bond issuance was particularly high in the seven-year tenor, resulting in the allocation of ZAR425 million to that tranche, which bodes well for our long-term funding structure,” CFO Ntobeko Nyawo said in a statement.

“South Africa’s debt capital market is experiencing a recovery in demand for high-quality commercial instruments with an ESG [environmental, social, governance] underpin.”

Currently, Redefine holds 123 Green Star SA certifications across its portfolio, including the Alice Lane and 90 Grayston Drive office properties in Johannesburg.

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The green bond is also expected to support the long-term decarbonisation of buildings, which will mainly focus on reducing energy consumption by improving efficiencies, mutual collaboration with tenants and solar PV expansion.

“This latest green bond issue further improves our funding match between our assets and liabilities in our capital structure and reaffirms our commitment to placing ESG at the heart of what we do,” Nyawo said.

“We believe that this will continue to play a critical role in strengthening and solidifying our balance sheet.”

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