Helping Hammerson take its sustainable ambitions to market
26 Oct 2021
Hammerson, owner, manager and developer of urban real estate, has issued a €700m sustainability-linked bond. The first in the European real estate sector.*
Hammerson owns 1.8m square metres of flagship retail destinations and premium outlets in seventeen cities across seven European countries, including the UK, Ireland and France. Following the reduction in footfall caused by COVID-19, the developer has been actively repositioning its portfolio and focusing on its ambitious Environmental, Social and Governance (ESG) objectives. It has committed to being net positive for carbon emissions, water demand, resource use and socio-economic impacts by 2030, and is aiming to have 100% of its assets certified as Net Zero Carbon by 2040.
Hammerson's ESG ambitions
An innovative issuance
Hammerson’s engagement with changing market conditions and its sustainability goals laid the groundwork for the developer to enter the bond market for the first time since 2016 with the global-first issuance of an investment grade consumer real estate sustainability-linked bond, supported by Barclays.
Barclays has a long history of working with Hammerson. This established relationship, combined with the bank’s experience in green bonds and sustainability-linked debt finance, meant it was well positioned to help Hammerson take the next step on its sustainability journey.
Barclays acted as ESG Structuring Advisor and Bookrunner, driving the structuring, marketing and execution of the deal. The €700m six year bond was structured to be eligible for the European Central Bank’s Corporate Sector Purchase Programme, making it attractive to investors across Europe. It also included two unique KPIs – a 60% reduction in Scope 1, 2 and selected Scope 3 greenhouse gas emissions by corporate activities and directly controlled tenants’ consumption, and a 50% reduction in Scope 3 tenant-controlled operational emissions by the end of 2025 – that would be linked to the final year coupon value.
It was key to the success of the issuance that we were able to appeal to a broad range of investors while also matching corporate beliefs with financial goals. As a result, the bond included bold targets for the reduction of emissions by Hammerson and its brands, delivered through behaviour influence and elevated fit out standards.
Brendan Jarvis, Vice Chairman, EMEA, Barclays
The bond not only helped Hammerson align its latest benchmark financing with its sustainability strategy, it also proved to be extremely appealing to the market. The issuance was well-supported in the market, signalling how interested investors are in innovative opportunities that have ESG-focused ambitions embedded within them.
The Sustainability Linked Bond demonstrates how Hammerson is engraining sustainability into everything we do. Our vision is to ensure we continue to thrive in a low carbon, city-based, 21st century economy with ambitious targets to be Net Positive by 2030. The bond aligns our commitment to achieving our sustainability targets to our financial targets and represents a continuation of our long-term, sector leading sustainability journey.”