Scape Melbourne

Scape Melbourne

Scape converts $1.4 billion loan into sustainability linked financing to pursue vision of being ‘Earth’s Best Living Company’

Australia’s largest owner and operator of purpose-built student accommodation (PBSA), Scape, has converted a $1.4 billion loan into a sustainability-linked loan (SLL) to assist in meeting its environmental, social and governance (ESG) targets.

Closed late September 2023, the SLL is believed to be the largest and first for Australia’s PBSA sector, setting a new benchmark in sustainable finance for Australian property companies.

In signing the SLL and pledging to switch to renewable electricity and pursue Green Star Performance ratings across its operating portfolio, Scape is incentivised to achieve a potential interest-rate reduction of up to 5 basis points against the finance borrowed, provided the agreed sustainability outcomes can be met.

Scape’s Chief Financial Officer, Tim Peel

Scape’s Chief Financial Officer, Tim Peel said the PBSA provider’s 27 Core Program assets across Sydney, Melbourne, Brisbane and Adelaide would be bound by the SLL targets, accounting for more than 80 per cent of the operational portfolio.

“SLLs and similar sustainable finance instruments are relatively new to the Australian property sector so it is significant that Scape is undertaking this SLL, as a demonstration of the maturity of the PBSA sector as a critical component of the ‘alternative’ real assets category,” Mr Peel said.

“With this SLL, we are seeing evidence of a level of sophistication in the sustainability approach in PBSA and alternative investments, matching best practice in Australia’s core real estate sectors of commercial office, retail and industrial, which is, in fact, global best practice.”

Mr Peel referenced Australia’s Global Real Estate Sustainability Benchmark (GRESB) results since inception as evidence of the country’s status as a global leader in sustainable real estate.

“Scape is now demonstrating this level of global leadership in the residential space, which has historically lagged behind the commercial office market leadership position,” he said.

Acting as an important tool to incentivise companies’ sustainability performance by linking loan interest margins to key performance indicators (KPIs) for material and ambitious sustainability targets, sustainability-linked financing is growing in prominence across a diversity of industries, from property and funds management to education, airports, healthcare and energy.

In line with Scape’s vision to be the ‘Earth’s Best Living Company’, a certain proportion of the proceeds of its SLL will go towards achieving its ambitious ESG objectives across all 27 of its operating core fund assets. Scape’s range of ESG objectives will include improved health and wellbeing outcomes for Scape residents, lower carbon emissions, minimised waste, improved recycling and circular economy initiatives, and accommodation scholarships for people in need.

Under its SLL, Scape is specifically aiming to achieve the following ambitious sustainability performance targets:

  • 100 per cent renewable electricity or equivalent large-scale generation certificates across all 27 Core Program assets; and
  • Green Star Performance certification for all 27 Core Program assets.

“To achieve these ambitious goals, Scape aims to be a leader in the operation of sustainable buildings and to create new developments that are fit for the future and for our residents needs,” Mr Peel said.

Scape Students

Deborah Leerhsen, Executive General Manager for Global Institutional Banking Coverage at Commonwealth Bank (CBA), said that Scape was “breaking fresh ground for Australia’s sustainable finance market by issuing the first SLL in the Australian student accommodation sector”.

“With this SLL, Scape is embedding its ambitious sustainability strategy in its financing by tying the cost of funds to achieving targets for renewable energy procurement and Green Star building performance ratings – two areas that align with its mission to provide students with quality, purpose-built and purpose-driven accommodation.”

“Scape’s forward-thinking approach to student accommodation has helped it achieve a market-leading position and we at CBA commend Scape’s sustainability commitment and continued support of Australia’s education sector” Ms Leerhsen said.

CBA served as Joint Sustainability Coordinator and one of 12 lenders to the SLL.

ANZ is another of the 12 SLL lenders, also acting as Sustainability Coordinator. ANZ is committed to working with customers that support social and environmental sustainability, including those taking action to lower their carbon emissions to achieve improved sustainability outcomes. In April this year, ANZ launched a new target to fund and facilitate at least $A100 billion by the end of 2030 towards improving social and environmental outcomes through customer activities and direct investments by ANZ.

ANZ’s Head of Sustainable Finance, Katharine Tapley, said the bank is “pleased to be involved in this important project with Scape, helping facilitate its inaugural SLL”.

“This is a landmark SLL for the PBSA sector, which helps set a new industry standard, supporting ongoing development of sustainable student accommodation” she said.

Scape Adelaide

For more information on Scape’s ESG targets, please visit

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