The SEGRO European Logistics Partnership (SELP) was created in October 2013 as a 50:50 joint venture between SEGRO and the Canadian Public Sector Pension Investment Board, with the objective to develop a leading Continental European logistics platform. Today, SELP owns €7.6 billion of big box warehouses and development land across seven Continental European countries.
SELP is managed by SEGRO, a UK Real Estate Investment Trust (REIT), owning or managing 9.7 million square metres of space, valued at £23.8 billion, serving customers from a wide range of industry sectors.
In May last year, SEGRO published its Green Finance Framework, building on the Responsible SEGRO framework launched in February 2021. The Framework, which applies to SEGRO, its subsidiaries and joint ventures (including SELP), integrates its financial strategy with the three Responsible SEGRO commitments: 1) championing low-carbon growth and net-zero by 2030 2) investing in local communities and environments 3) nurturing talent.
Eligible green projects, which can be financed and refinanced through green bonds, loans and other debt products, include the development and acquisition of buildings with high quality environmental certifications; refurbishment of existing buildings, to improve their energy efficiency; and projects which encourage clean transportation, generate renewable energy, reduce pollution and have a positive influence on local biodiversity.
In May 2021, SELP issued its inaugural green bond, for which it recently published an impact report, citing estimated savings of 761 tonnes of CO2 from the renewable energy generated by solar panels financed through the bond’s proceeds.
Looking to follow up on its green issuance last year, SELP approached NatWest, who has supported all of SELP’s capital market transactions in the past.
The deal team agreed on a short, one-day investor roadshow which saw SELP’s management team brief investors on the purpose of this second green bond.
Announcing a 5-year green senior note to the market, the order book quickly reached a volume of approximately €2.5 billion with SELP releasing guidance for a bond size of between €650-€750 million. Orders peaked at €3.1 billion, which allowed SELP to tighten the pricing, setting the final coupon at 3.75% and the final size for the green bond at €750 million.
Harry Stokes, Commercial Finance Director, SEGRO, commented: “We are very pleased that investors have expressed their continued confidence in our sustainability strategy, recognising our credit quality and supporting our efforts to reducing the carbon intensity of our portfolio.”
Sunil Kainth, NatWest, said: “Having supported SELP with their previous capital markets transactions in 2016, 2017 and 2019 in conventional format, and their first green bond last year, we’re delighted to have also been at our customer’s side for their second green bond. Despite challenging market conditions, investors have shown strong support for SELP, testament to the strength of SELP’s strong credit story and their proactive investor engagement.”
Dean Shahfar, NatWest, added: “We were delighted to have supported SELP with the issuance of their second green bond. This transaction builds on the success of their inaugural deal, and represents a vote of confidence in their sustainability credentials, backed up by their robust impact reporting which demonstrates the positive impact of their projects. Sustainability is at the heart of our purpose-driven strategy, and we’re committed to guiding corporate and institutional customers such as SELP to transition to net-zero.”
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