2024
/ 2
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Nexus Select Trust (NXST), India’s first listed retail real estate investment trust, has raised ₹700 crore through a 10-year listed sustainability-linked bond (SLB), marking a first-of-its-kind issuance for the domestic REIT sector.
The fundraise includes a mix of a 10-year sustainability-linked bond and a ₹200 crore floating-rate tranche linked to the three-month MIBOR overnight indexed swap (OIS). Proceeds will be primarily used to refinance existing borrowings, translating into annualised interest cost savings of around 90 basis points, or nearly ₹6 crore.
The issuance was anchored by the International Finance Corporation (IFC), a member of the World Bank Group, which invested ₹250 crore. This marks IFC’s first investment in an Indian retail REIT.
The sustainability-linked structure ties Nexus Select Trust’s financing costs to the achievement of predefined environmental targets. These include reaching net-zero emissions by 2030 and obtaining EDGE green building certification—developed by IFC—for new acquisitions. Legal advisory for the transaction was provided by Trilegal.
“This transaction reflects our intent to align capital raising with our sustainability roadmap,” said Rajesh Deo, Chief Financial Officer of Nexus Select Trust. “We are pleased to be the first retail REIT in India to issue a 10-year sustainability-linked bond with a floating-rate structure and to welcome IFC as a long-term partner in our net-zero journey.”
Imad N. Fakhoury, regional division director for South Asia at IFC, said the investment would help improve energy efficiency across Nexus Select Trust’s portfolio and accelerate progress toward sustainable operations by 2030. He added that the deal aligns with India’s development priorities and demonstrates how innovative financing can unlock value from existing real estate assets.
As part of the issuance, Nexus Select Trust secured an independent second-party opinion on its sustainability-linked financing framework, which assessed the targets as material and credible, and aligned with the Securities and Exchange Board of India’s framework for ESG debt securities, excluding green bonds.
The transaction underscores Nexus Select Trust’s growing focus on sustainability-linked financing, innovation in debt structures and long-term responsible growth.
