Green bond usage by US real estate investment trusts fell to a six-year low in 2023, with just three green bond issuances totaling $1.6 billion in gross proceeds recorded, according to an S&P Global Market Intelligence analysis.
Bond issuances generally slowed for the REIT sector in 2022 amid rising interest rates, with green bond issuances in turn, totaling $5.14 billion. Despite a low number of bond issuances in 2022, green bonds remained at a relatively high percentage of 17.6% of total proceeds for the year.
Digital Realty Trust top green bond issuer
All three of the green bond offerings in 2023 came in the first half of the year.
Office REIT Boston Properties Inc. completed the largest green bond offering in 2023, at $750 million on May 4. Another office REIT, Alexandria Real Estate Equities Inc., raised $500 million through a green bond offering on Feb. 2, while shopping center REIT Federal Realty Investment Trust closed a $350 million green bond offering on April 10.
Datacenter REIT Digital Realty Trust Inc. has raised the most proceeds through green bond offerings since 2018, with nearly $6.09 billion. Digital Realty Trust also sold $500,000 of green bonds in 2015.
Boston Properties ranked second, with $5.05 billion raised through green bond offerings since 2018, while Equinix Inc., another datacenter REIT, placed third with $4.88 billion raised.
In late December, Equinix announced that all of its green bond proceeds had been fully allocated, with net proceeds used to support 172 green building projects across 105 sites, 33 energy efficiency projects as well as two power purchase agreements. The power purchase agreements support 225 MW of renewable energy capacity, which the REIT expects to mitigate 383,300 metric tons of carbon dioxide emissions annually.
– Set email alerts for future Data Dispatch articles.
– For further capital offerings research, try the Global Real Estate Capital Offerings Activity template.
