The Netherlands: Amsterdam-based boutique hotel group citizenM has secured a dual currency €243.3 million and £201.7 million sustainability-linked loan (SLL).
The funding is linked to ESG (environmental, social and governance) targets such as reducing CO2 emissions and improving green building certifications.
It will incentivise citizenM to achieve environmental benchmarks in a bid to secure lower interest rates. citizenM currently operates 31 hotels worldwide across 18 cities and nine countries. A further 14 properties are under development.
HSBC UK and HSBC Continental Europe, ABN AMRO Bank N.V., and Aareal Bank provided equal funding. HSBC UK acted as the facility agent whilst HSBC Continental Europe acted as sustainability-linked loan coordinator.
Elizabeth Davies, head of hotels at HSBC UK, said: “With its high profile in the hospitality sector, we expect that citizenM’s relatively early adoption of the sustainability-linked loan will help to drive further market adoption, as hospitality groups seek to demonstrate a serious commitment to creating positive impacts on the environment.”
Klaas van Lookeren Campagne, CEO at citizenM, said: “At citizenM, we take sustainability seriously. We seek to build and operate hotels that minimise our impact on the environment, and it is important to us that our ongoing commitment to sustainability is reflected in every facet of our business. For this reason, we are immensely proud to have secured sustainability-linked funding, particularly given the complexity of the transaction, completed by a diverse lender group across Europe.”
Michelle Weiss, head of hotel properties at Aareal Bank, said: “As the lender of the first citizenM properties in Amsterdam back in 2008, we are pleased that we can continue to strengthen our long-standing relationship with citizenM and support the company’s commitment to sustainability targets with the refinancing of this portfolio. Hotels remain a key growth driver for Aareal Bank’s commercial lending portfolio.”
Fred Bos, head of ABN AMRO’s commercial clients sector, added: “We see climate change as the greatest threat to humanity. We view this cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way. We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”
Further information about citizenM’s ESG strategy can be found here.