CBRE Investment Management Closes Third Green Bond Issuance in EMEA Raising €750 Million

CBRE Investment Management, on behalf of a fund sponsored by the firm, has priced its third Green Eurobond debt offering of senior unsecured notes raising €750 million. The issuance marks the return of the fund to the public debt market since 2021 as well as the fund’s inaugural issuance of its €3 billion Euro Medium Term Note (EMTN) Programme.

The Green bond has a maturity of 10 years, a coupon of 4.75%, and is rated BBB+ by S&P. The re-offer spread was set at €mid-swap plus 205 basis points, which implies a zero new issue premium to comparable sector comps.

The order book reached more than €2.4 billion at peak from over 120+ unique investor orders and was oversubscribed by 3.0x at final terms. Over 95% of the deal was allocated to high-quality Tier 1 European ‘buy and hold’ real money accounts with the majority of the bond allocated to asset managers, bank treasuries, pension funds and insurance companies.

To align with CBRE Investment Management’s (“CBRE IM’s”) Sustainability ambitions and that of the fund, the bond has been structured as a Green bond. The fund will allocate 100% of the net proceeds from the issuance of each Green instrument (loan or bond or any other financing instrument) to green projects (“Eligible Green Projects”) satisfying one or more of the eligible indicators and performance requirements. The Green Finance Framework has been assessed and approved for accuracy and integrity by Sustainalytics, acting as SPO (“Second Party Opinion”) provider.

Mark Pennington, Fund Chief Financial Officer, CBRE IM commented: “We have seen a significant improvement of the bond markets since October last year, and that strong demand for real estate paper has continued in 2024. This bond issuance marks the first diversified core fund to tap the market again since April 2022.”

Mark added: “The fund is set up to benefit from a wide variety of debt sources, but we clearly prefer the public bond market because of its ticket size and ease of use. Especially now that we have an EMTN Programme, there is a lot of flexibility to pick the best issuance window to do another capital markets funding round. With a large Revolving Credit Facility, the €750 million bond proceeds, and still a low average cost of debt and long weighted average debt maturity profile, the fund is well positioned to continue to meet our investor requirements by delivering on their long-term investment performance objectives.”

ABN AMRO, CACIB, Deutsche Bank, Goldman Sachs and ING acted as Joint Active Bookrunners to CBRE IM. Linklaters advised CBRE IM. The Joint Active Bookrunners were advised by Clifford Chance.

About CBRE Investment Management
CBRE Investment Management is a leading global real assets investment management firm with $147.5 billion in assets under management* as of December 31, 2023, operating in more than 30 offices and 20 countries around the world. Through its investor-operator culture, the firm seeks to deliver sustainable investment solutions across real assets categories, geographies, risk profiles and execution formats so that its clients, people and communities thrive.

CBRE Investment Management is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE), the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE Investment Management harnesses CBRE’s data and market insights, investment sourcing and other resources for the benefit of its clients. For more information, please visit www.cbreim.com.

*Assets under management (AUM) refers to the fair market value of real assets-related investments with respect to which CBRE Investment Management provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real assets-related loans. This AUM is intended principally to reflect the extent of CBRE Investment Management’s presence in the global real assets market, and its calculation of AUM may differ from the calculations of other asset managers and from its calculation of regulatory assets under management for purposes of certain regulatory filings.