Masdar Green REIT signs green financing commitment with FAB for growth of its portfolio

Masdar City, Masdar’s pioneering sustainable urban development in Abu Dhabi, through its Masdar Green Real Estate Investment Trust (REIT), has signed a financing commitment in the amount of USD$200,000,000, with First Abu Dhabi Bank (FAB) relating to financing of the REIT portfolio to facilitate further acquisitions and portfolio growth. FAB will act as sole mandated lead arranger and bookrunner, green loan coordinator, agent, security agent and account bank for this transaction.

The announcement was made during an official signing ceremony held at the 4^th Abu Dhabi Sustainable Finance Forum during Abu Dhabi Sustainability Week – the global platform for accelerating sustainable development hosted by Masdar. The announcement comes 12 months after Masdar City partnered with Emirates NBD Asset Management to receive management services for the UAE’s first sustainable REIT.

“Investors are increasingly looking for ‘responsible’ investment opportunities and evaluate companies based on specific environmental, social and governance (‘ESG’) practices criteria,” said Abdulla Balalaa, Executive Director, Masdar City and Chairman of the REIT.

“The Masdar Green REIT’s portfolio currently includes four commercial properties within Masdar City, which is the pioneering sustainable urban development project, and technology innovation hub, in Abu Dhabi. The financing from First Abu Dhabi Bank, will help the REIT in building its sustainable real estate portfolio through additional acquisitions of properties in Masdar City. The proceeds of these acquisitions will in turn assist Masdar City to bring more sustainable real estate assets to market through new sustainable developments and continuing the future expansion of Masdar City.”

As the UAE’s largest bank and one of the world’s largest and safest financial institutions, FAB is a regional leader for sustainable finance in the Middle East. FAB issued the region’s first green bond in 2017 and has financed over USD 30 billion in sustainable projects to date. In 2021, the bank executed the first green repurchasing (‘repo’) transaction in the Middle East, structured in partnership with Deutsche Bank. FAB was also the first bank in the region to commit to net-zero greenhouse gas emissions by 2050 and to join the Net-Zero Banking Alliance and was part of the official UAE delegation to the COP26 climate conference.

Mustafa Al Khalfawi, Head of Global Banking UAE and Global Head of Government, Sovereigns & Public Sector, Investment Banking Group, said, “First Abu Dhabi Bank has made a commitment to fund projects that deliver tangible environmental and social benefits, and we are leading the way forward in financing the transition to a more sustainable future. As one of our strategic clients, we are delighted to support Masdar City in this landmark transaction, with an innovative and flexible financing structure to enable the Masdar Green REIT to fulfil its strategic objectives. The transaction serves to underline FAB’s ongoing commitment to Masdar and sustainable financing, and we look forward to further deepening our relationship as Masdar implements its exciting plans to grow its high-quality portfolio.”

Masdar City announced it was launching the green REIT, the first in the UAE to invest solely in sustainable real estate projects, during Abu Dhabi Sustainability Week (ADSW) in January in 2020. The Masdar Green REIT was established at Abu Dhabi Global Market (ADGM) as a Qualified Investor Fund (QIF) and is managed by Masdar Capital Management Limited which is regulated by the Financial Services Regulatory Authority. Masdar Green REIT intends to offer an attractive opportunity for professional investors through private placement to invest in a unique portfolio of stable, income-producing, sustainable real estate assets.