Mindspace REIT Raises ₹650 Crore from IFC via Sustainability Linked Bonds

Mindspace Business Parks REIT has raised ₹650 crore by issuing sustainability-linked bonds to the International Finance Corporation (IFC), the private sector arm of the World Bank Group. This makes Mindspace REIT the first Indian REIT to issue such bonds, which are tied to achieving specific environmental, social, and governance (ESG) targets.

The bonds, which have a tenure of seven years, will primarily be used to refinance existing loans. The coupon rate of these bonds is linked to Mindspace REIT's commitment to meet certain ESG goals aimed at fostering a greener ecosystem. According to the company’s statement, the fixed coupon rate will be adjusted downwards in stages as the company meets its set ESG targets.

Ramesh Nair, CEO of Mindspace Business Parks REIT, expressed his enthusiasm about this achievement, highlighting that this issuance follows their maiden green bond issue in March 2023. He emphasized that this move is aligned with their purpose of building sustainable ecosystems, thereby creating long-term value for stakeholders by combining financial success with environmental and social benefits.

Wendy Werner, IFC Country Head for India, also commented on the partnership, noting that IFC's investment will help enhance the sustainability of Mindspace's portfolio of business parks and reduce greenhouse gas emissions annually. Mr. Werner added that this initiative supports India's net-zero ambitions and showcases the potential of climate finance in the real estate sector.

In addition to this financial development, Mindspace Business Parks REIT has been actively collaborating with institutions to further its sustainability goals. In January 2024, the company announced a partnership with IIT Bombay for a research project focused on Climate Risk Assessment. As part of a pilot project, they set up on-site weather stations at Mindspace Airoli West in the Mumbai Metropolitan Region.

Mindspace REIT, sponsored by the K Raheja Group, boasts a portfolio of 33.2 million square feet, including 26.3 million square feet of completed area. The company is committed to various ESG targets critical to its operations, such as reducing greenhouse gas emissions (Scope 1, 2, and 3), increasing the share of green-certified areas for existing buildings, and lowering energy intensity.

This strategic move by Mindspace REIT not only reinforces its dedication to sustainability but also positions it as a leader in integrating ESG principles within the Indian real estate sector. As the real estate market continues to evolve, such initiatives are likely to attract more diverse and long-term funding, essential for building a greener and more resilient future.