Client stories

PELF successfully taps into capital markets

Prologis European Logistics Fund (PELF) (A3 Stable (Moody’s) / A- Stable (S&P)

Formed in August 2007 with the purpose of owning and operating core industrial distribution properties across Europe, Prologis European Logistics Fund (“PELF”) (ticker PRIFII) is Europe’s largest open-ended logistics fund with a high-quality portfolio, managed by Prologis. 

Prologis European Logistics Fund (“PELF”), Europe’s largest pan-European logistics property fund, which has a core portfolio of 628 distribution facilities in 12 countries – has a long-standing commitment to sustainability. At the end of H1 2022, PELF had 171 sustainably certified buildings, with further commitment to minimise the environmental impact and grow its portfolio of certified sustainable buildings.

In 2020, Prologis published its updated Green Bond Framework. The Green Bond Framework outlines the range of real estate - focused green use of proceeds categories - green buildings, energy efficiency and renewable energy – that can be funded with the proceeds of the green bonds. PELF was the first ever logistics real estate issuer issuing a EUR Green Bond in 2018, and now over 90% of its outstanding bonds are green bonds (by volume issued).  As per PELF’s most recent Green Bond report, the net proceeds from the green bonds issued in 2020 and 2021 were allocated to green buildings with qualifying sustainable building classifications. The net proceeds were allocated in line with the green use of proceeds categories. Across all of PELF Green Bond portfolios, there is a total estimated CO2 avoidance of 65,173 tons CO2 per year.

Investor appetite for PELF’s green bonds continues to be very solid

Having supported PELF in six green issuances already, NatWest was again mandated to support, this time in the role of Active Bookrunner. This was PELF’s third green transaction for this year; following a EUR benchmark in May and an inaugural dual-tranche Sterling deal in February.  

The deal was announced with an estimated size of around €500 million and a 7-year tenor to the market. Investors, who are well familiar with PELF’s credit and sustainability story, grew the orderbook steadily to €1bn. The strong demand allowed PELF to tighten the price and to upsize the green bond to €550 million. The final coupon was set at 3.625%.

With 62%, asset managers took the largest chunk of the allocation, while - looking at geographies - investors from France led the demand, taking 28%, followed by investors in Germany (22%) and in the UK (19%).  More than 75% of the allocation went to investors with at least modest ESG commitments (60% with strong commitments and 16% with modest commitments).

Strong investor demand shows confidence in PELF’s sustainability achievements and Prologis path to net zero

Christian Nickels-Teske, Head of Treasury Europe and Capital Markets at Prologis, commented: “We are very pleased with the continued support we receive from investors, showing us that they acknowledge our sustainability achievements so far and have taken note of Prologis’ ambitious net zero commitment.”

Marius van der Vorm, Head of Corporate Coverage NLBE, NatWest, said: “We congratulate PELF on another very successful green issuance with investor demand underlining PELF’s attractiveness and credibility and are thrilled that PELF have achieved such a strong outcome’

Dr. Arthur Krebbers, Climate and ESG Capital Markets at NatWest, said: We’re excited to have been able to help PELF with another Green Bond, after supporting PELF with six other green issuances over the years. This transaction is also an example of NatWest’s commitment to actively help in building a greener economy and future by supporting our corporate and institutional customers in accessing the sustainable finance markets, and our target to provide£100 billion Climate and Sustainable Funding and Financing to our customers by the end of 2025.”

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