How are S-REITs performing in ESG?

Singapore REIT is currently creating a framework to stay in line with Environmental, Social, and Governance (ESG) goals. However, they must sustain these visible efforts and improve their score, according to a Maybank report.

Maybank added that Manulife US REIT outperformed other REITs. Maybank uses its funds to invest in US commercial real estate and carry out enhancements to develop assets and properties to optimise its value for unit holders.

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“Manulife US REIT leads the score with robust ESG reporting metrics, a well-established framework and measurable targets,” shared Maybank.

“It is susceptible to sustainability-focused investors with a strong preference for investing in companies that meet specific ESG criteria, given its incessant need for additional capital,” Maybank added.

It garnered a 5-star rating in the Global Real Estate Benchmark. Additionally, it posted a 93 score, which proved it outperformed its peers in three aspects of ESG. It also ranked fifth out of 13 US office REITs.

By 2050, it is also expected to cut its carbon footprint by a staggering 80%.

Other REITs have started their effort to be on an ESG roadmap. For example, Maybank shared that Prime US REIT started portfolio-wide Energy Star/LEED recertification, as well as benchmarking.

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Not only that, but one in four buildings in Aims APAC REIT’s portfolio already achieved green certification. AAREIT’s manager has identified a decrease in Scope 1 and 2 carbon emissions as a focus area.

“That said, we recognise sustained efforts have to be made to improve the ESG scores,” said Maybank.

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