11 November 2021
Grosvenor Europe completes first green financing deal
The deal releases significant equity for reinvestment in Spanish market and supports Grosvenor’s journey to a net zero carbon directly-managed portfolio by 2030.
Grosvenor Europe (Grosvenor) has signed the Grosvenor Group’s first green secured financing agreement. The deal constitutes a refinancing of Grosvenor’s Titán 8 building in Madrid, releasing significant equity for the group to advance its Spanish investment programme. It also supports Grosvenor’s journey to managing a net zero carbon portfolio by 2030.
The refinancing of Titán 8, agreed with Spain’s largest bank, Santander, represents €24.5m. The deal releases equity for Grosvenor to capitalise on new deal opportunities in Spain, following the acquisition of €250m of office buildings in the last few years. Recent deals include Titán 8, IDOM and the Naturgy headquarters, which Grosvenor recently renovated in collaboration with the sole tenant.
The loan complies with the components of the Green Loan Principles and is labelled green due to Titan 8’s LEED Gold certification status, which reflects the building’s high sustainability credentials. Grosvenor is required to maintain the certification every five years, helping to continuously deliver on its various sustainability commitments, including halving its carbon emissions by 2030.
At acquisition in late 2020, Grosvenor undertook a net zero carbon scoping audit of the asset, which confirmed its alignment with its net zero pathway requirements. Since then, Grosvenor has implemented several improvements, including the refurbishment of communal lobby areas, a new green terrace, cycle storage and LED lighting, as well as the installation of HVAC consumption monitors. Grosvenor is also in the process of installing electric vehicle charging.
Sara Lucas, CEO, Grosvenor Europe, commented: "Climate change presents a clear risk for business. By acquiring and managing sustainable buildings, and improving the environmental credentials of our existing portfolio, we are investing in a more sustainable future for our business, our assets, and setting an example for the property industry to work towards a climate positive future.
“This green financing reflects that our environmental commitments are factored into our governance processes and being implemented at a practical level, supporting our journey to a net zero carbon directly-managed portfolio by 2030.”
Alfonso Agulló, Head of Commercial Real Estate Financing Team in Iberia for Santander Corporate & Investment Banking, commented: "We are very excited to support Grosvenor on this transaction, which further strengthens the excellent relationship we have had with the group for many years in the UK. Additionally, the fact that this transaction is considered as green financing only highlights Santander's current focus on enhancing this type of deal".
Grosvenor Europe previously committed to achieving net-zero carbon operational emissions from all directly managed buildings globally by 2030, and to work towards all buildings, directly and indirectly managed, being embodied and operationally ‘net zero’ by 2050.
About Grosvenor Europe
Grosvenor Europe invests in, develops and manages real estate assets in vibrant European cities including Paris, Stockholm and Madrid. As a part of Grosvenor Group, with a track record of over 340 years, our activities are designed to improve properties and places that will deliver lasting commercial and social benefit in the places we are active.
Our approach to delivering social benefit identifies five priority areas where we believe we can have the most measurable impact on social and environmental sustainability and in 2020 we launched our net zero carbon strategy, committing us to halving our total carbon impact by 2030. This target was approved by the Science Based Targets Initiative and verified in line with the most ambitious trajectory of the Paris Agreement, to limit global warming by 1.5oC.
As at 31 December 2020, we managed £1.7bn AUM, including a several residential development projects, a growing office portfolio in Madrid and Paris, and retail-led assets in Stockholm.
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