Barings agrees first green loan for Romford’s Brewery

Barings has agreed its first sustainability-linked loan in the UK. The loan, along with another in the Netherlands, marks Barings Real Estate’s first sustainability-linked lending in Europe. Barings has provided a seven-year fixed-rate loan of £48.6m, alongside investor Phoenix Group, to finance the acquisition of the Brewery, a retail and leisure park in Romford, east London. The Brewery is being bought by a joint venture between Schroders Capital UK Real Estate Fund and Immobilien Europa Direkt. The loan will be used to improve the ESG credentials of the scheme without ceasing day-to-day operations, as the property is almost fully let. This will include retrofitting the existing buildings to increase EPC ratings, achieving a BREEAM Excellent certification and investing in biodiversity net gain, health and wellbeing, and tenant and community engagement initiatives. Barings has also provided a loan to a company managed by Round Hill Capital to finance the refurbishment of the Rembrandt Park One building in Amsterdam into a grade-A sustainable office building. Sam Mellor, head of European and APAC real estate debt at Barings, said: “These loans are not only substantial additions to our growing real estate debt offer, but also an example of our appetite to innovate in order to seek greater returns for investors and make a tangible environmental impact.” Prabjot Mann, head of property at Phoenix Group, said “Phoenix is delighted to have provided £48.6m of funding for Barings’ first sustainability-linked loan in the UK. This investment is closely aligned to Phoenix’s sustainability agenda; we have significant appetite for real estate loans which motivate borrowers to upgrade existing assets due to the dual benefits of improving the property’s environmental and social impact as well as supporting long-term value.” Barings currently has around $350bn of assets under management and is looking to extend its green lending. Charles Weeks, head of European and APAC real estate, said: “Reflecting both the increasing importance to investors as well as our values as a business, Barings is increasingly seeking to apply strong ESG standards to our projects. “While we have had many more opportunities to focus and shape our assets secured through equity up until now, we have been eager to find the right opportunities for sustainability-linked loans for some time. We are keen to explore further such loans across Europe.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Image from Barings