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SEGRO’s inaugural Green Bond to support sustainable properties

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Founded in the 1920s and listed on the London Stock Exchange since 1949, SEGRO is a leading pan-European owner, asset manager and developer of modern warehousing and light industrial properties. With a presence in the UK and seven Continental European countries, SEGRO is the largest UK and European REIT by market cap.

SEGRO’s sustainability strategy, “Responsible SEGRO (PDF)”, outlines the company’s approach to corporate responsibility, aiming to achieve low-carbon growth, invest in local communities and environments, and nurture talent. 

In May this year, SEGRO published its Green Finance Framework (PDF), which is linked to the commitment to be net zero carbon by 2030. The holistic framework covers a range of green projects: the development of green buildings, clean transportation projects promoting the use of low carbon transport by installing electric vehicle charging points and cycling facilities, renewable energy and energy efficiency projects, and initiatives aiming to prevent and control pollution and help improve terrestrial biodiversity.  

Debut Green Bond achieves joint lowest coupon for a EURO transaction from the real estate sector

Following the debut Green Bond of SELP, SEGRO’s joint venture with Canadian pension fund, Public Sector Pension Investment Board, which NatWest supported as Active Bookrunner, SEGRO asked the NatWest team to act in the same role to support the launch of its debut Green Bond.

Announcing a 10-12 years, €500 million senior unsecured Green bond, SEGRO followed NatWest’s advice to conduct a 2-day virtual roadshow meeting with over 70 investors through a group investor call and 1-on-1s. SEGRO’s strong sustainability credentials, evidenced through an MSCI AAA ESG Rating, and SELP’s much welcomed green debut, helped during the marketing of the transaction.  

Consequently, initial orders for SEGRO’s Green Bond quickly reached over €3.5 billion, allowing to significantly revise the pricing, setting the spread at +55 basis points above Euro mid-swaps.  The final orderbook for the ten-year issuance included 130 investors and five triple-digit orders.

With a coupon of 0.500%, SEGRO achieved the joint lowest coupon for a EURO transaction from the real estate sector at this maturity.

The proceeds of the issue will principally be used to finance and/or refinance Eligible Green Projects as outlined in SEGRO Green Finance Framework, as well as providing funding for general corporate purposes.

Investors welcome SEGRO’s green strategy

Sunil Kainth, Debt & Financing Solutions, NatWest, said: “We are thrilled for our customer, SEGRO, to have received such an extremely strong reception from investors for its debut green bond. The high demand was driven by the warehouse-focused business profile, given much of the logistics supply in Europe has come from big box providers. We are also very pleased with the positive engagement from dedicated ESG investors.”

Dr. Arthur Krebbers, Head of Sustainable Finance Corporates at NatWest, stated: “We’re excited to have been able to help SEGRO with its debut Green Bond after supporting SELP issuing its first green transaction earlier in the summer. Climate is of paramount importance to our business, our customers and the economies we operate in, and we continue to support companies preparing their transition to sustainable operations such as SEGRO.” 

Soumen Das, SEGRO Chief Financial Officer, commented: “We are delighted with the support for SEGRO’s first Green and first euro-denominated bond issue, achieving a 0.5% coupon and 10-year maturity. The level of oversubscription we received for the issuance underlines investors’ recognition of the strength of our business and the importance they rightly place on sustainable investment. The proceeds will be invested in line with our Responsible SEGRO framework including the construction of new properties with high sustainability credentials through our very active development programme.”

The information provided in this article has been prepared by National Westminster Bank Plc (NatWest) for information purposes only and is subject to change from time to time. The information and views expressed should not be treated as advice or a recommendation of any kind. NatWest makes no representation, warranty, undertaking or assurance of any kind (express or implied) with respect to the adequacy, accuracy, completeness or reasonableness of the information provided and disclaims all liability for any use you, your affiliates, connected companies, employees, or your advisers make of it. NatWest accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However, this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

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