GRESB如何增加資產價值？
How GRESB can increase asset value?

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How GRESB can increase asset value?

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Key points
•    GRESB provide support to real estate companies in data collection, peer benchmark of the company performance, and help the company to identify risk and opportunities 
•    Previous research has provided information that the GRESB ratings are showing a positive correlation with asset-level return
•    Real estate companies have secured green bonds, sustainability-linked loans, and other green finance instruments through the achievement of high GRESB rating

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     The GRESB proves to be beneficial to real estate companies in many aspects. For the companies equipping GRESB, they will receive a platform to communicate with investors on sustainability topics which allows the asset managers to receive the peer benchmark of the company performance that provides a set of information to the company to measure the progress of the performance with the ESG strategies. Furthermore, the GRESB allows the company to identify risks and opportunities related to climate-related financial risk and sustainable related opportunities. The member of GRESB could employ the data collection for GRESB to align with other international frameworks related to ESG. Overall, the GRESB assessment provides data and insights to more than 140 institutional investors with $47 trillion in assets under management to monitor the ESG progress of the company's portfolio where fund managers receive access to view other asset managers that they are interested in. Moreover, the GRESB provides additional benefits to obtain green loans or other green finance tools, various banks also equipped GRESB to grant loans to reduce interest rates for companies that hold GRESB certification.
 
     Although GRESB provides different aspects of beneficiaries to the companies, one of the key benefits is that GRESB helps the company to increase asset value. Current research on REITs shows that companies reporting to GRESB typically have higher valuations and lower costs of debt (Feng and Wu, 2021). Whereas ESG-building certifications are important predictors of asset-level returns, they are not significant predictors of fund returns (Eichholtz et al., 2010). By using historical ANREV and GRESB data from 2012-2017, the data represent a set of results showing that fund performance improves by 0.852% for every 10-point increase in overall ESG score. Research by Friede et al. (2015) with the study of over 2000 related academic articles, found a positive association between ESG and financial performance even after controlling for variables such as gross asset value (GAV), gearing sector, geography, and reporting year.
 
     Many real estate companies have proved a positive relation between GRESB efforts in supporting their companies to increase the asset value through the issue of bonds with the bank or in receiving green finance investment. CapitaLand is a real estate company that established of a Sustainability-linked loan (SLL) from UOB in 2019. The loan is the largest sustainability-linked bilateral loan in Singapore’s real estate sector where the company and its real estate investment trusts have raised over 2.42 billion Singapore Dollars. The success of the sustainability-linked loan from UOB shows a direct link to the company’s achievements in the GRESB as in 2019, the CapitaLand came in first place across four categories and lead the Global ‘Diversified-Listed’ category with a rating of 5 stars. Furthermore, during the pandemic, the company has raised 1.5 billion Singapore Dollars through sustainable finance which has proven the financial resilience of the company and its continuous progress toward sustainability activities. 

     Frasers Property Limited announced that its subsidiaries, Frasers Property (UK) Limited (FPUK) and Hillington Park S.à r.l., have jointly secured a GBP110 million five-year bilateral sustainability linked to a loan. The sustainability-linked loan become the first to be established for the group in the UK with the condition that the FPUK to maintains its four-start GRESB rating, the loan will bring a reduction in interest margin from its second year. At the end of the 2021 GRESB ranking, the Frasers Property was able to achieve five global and regional sector leadership positions and the FPUK topped the local market category of investment with a score of 85, against the peer average of 68. Not only the FPUK that is securing the SLL but the Frasers Property Group as a whole are able to secure 25 green or SLL and two sustainability bonds raising more than 6 billion Singapore Dollars in total are partly from the company’s focus to achieve their sustainability goals and action towards the Net-Zero Carbon. 

     Keppel Land is another company that has secured the maiden sustainability-linked loan from DBS Bank, the first loan for the company in 2021. The loan required Keppel Land to meet the ESG targets and achieve a five-star rating in 2021 which aligns with the company’s vision of 2030 to focus on sustainability as the business core. DBS as one of the leading world banks has provided SLL to many real estate companies that have proven to achieve outstanding performance based on ESG targets and achieve four-star or higher GRESB ratings such as CapitaLand, Keppel Land, New world development, and Link.

     As the GRESB rating system allows real estate companies to improve their portfolio with their certification and rating, it has proven to benefit the company by outperforming the peers' companies and achieving green loans, green bonds, and sustainability-linked loans from the investor or the bank. These green finance tools allow the companies to use financial support for the companies’ daily activities, improve their action toward the companies’ sustainability agenda or vision and attract more opportunities for future investment. Therefore, with the adoption of the GRESB, the real estate companies are not solely providing the certification for the future of green building but helping the companies with the financial aspect in terms of future investment and internal management. Along with the growing number of investments in the green building with GRESB and other building certifications, real estate companies are willing to follow and improve their sustainability performance in order to achieve a high GRESB rating since the benefits of the GRESB are proven to be successful for the companies.