CBA provides ‘Australia’s first’ build-to-rent commercial green loan

A green loan of $130 million has been issued to Oxford Properties Group (Oxford) and the Investa-owned build-to-rent management platform Indi by the Commonwealth Bank of Australia (CBA), to help finance Sydney CBD’s first build-to-rent development.

It is believed to be the country’s first build-to-rent green loan. 

According to a statement provided by CBA, the loan will contribute to the construction of Indi Sydney City, a carbon-neutral, 5 Star Green Star, 234-apartment building. 

The development will be delivered and managed by Indi. 

CBA has also expressed that this will be the first build-to-rent development to achieve a National Australian Built Environment Rating System (NABERS) energy rating. 

Indi Sydney City is set to include a range of environmentally geared inclusions, such as regenerative lifts that will deliver between 20 per cent and 25 per cent improvements to lift energy efficiency; high-efficiency central cooling system and tempered air-conditioning; provision of energy and water-efficient appliances to all apartments; and submetering for “improved tracking of operational performance”.

Oxford and Investa secured the loan by collaborating on a “Green Financing Framework” in line with Green Loan Principles (GLP) – a benchmark guideline for the issuance of green loans across the world. 

Speaking of the loan, CBA’s managing director, future cities and networks Michael Thorpe said that Indi Sydney City has been designed to “deliver exceptional sustainability outcomes, so that residents share the views and amenities, as well as the building’s energy efficient infrastructure”. 

“We’re excited to bring the first premium built-to-rent offering to the Sydney residential rental market, and one that’s earned Green Loan certification through its strong sustainability credentials and a commitment to drive positive environmental outcomes,” Mr Thorpe added.

Oxford director development Nellie O'Keeffe echoed the sentiment, stating that: “Indi Sydney City is a wonderful example of the development and operation of an energy efficient, low-carbon community in action.

“At Oxford Properties, our purpose is to create economic and social value through real estate – safeguarding the future and creating opportunities for our customers, communities, partners and people. 

“The securing of this Green Loan will help us deliver one of the most sustainable places to live in Sydney.”

Investa general manager corporate sustainability Margot Black noted that the loan reflects the platform’s focus on building a low-carbon economy. 

“Investa has been focused on diversifying its sources of debt and supporting the growth of the sustainable finance market in Australia since the platform closed its first green loan in 2019,” she said. 

“The successful development of a Green Financing Framework with Oxford, and the execution of the first green loan for the Indi platform under this Framework, is a significant achievement for all parties. 

“It further re-enforces our leadership position in corporate sustainability and reflects our long-term commitment to transitioning to a low carbon economy.” 

The announcement comes after a series of environmentally focused steps taken by the big four bank over recent months. 

Earlier in October, CBA confirmed it had begun a pilot program for a new program designed to provide its customers a personalised carbon footprint tracker built around their spending data.

In September, the major bank introduced a commercial property loan upgrade for any businesses intending to reduce both their operating and environmental expenses.

In July, CBA announced it would be rolling out its green loan across the country, making it available to up to 600,000 of its customers.

Find out more about green loans and the environmental case for reducing carbon footprints in the September issue of The Adviser, out now.