Hong Kong’s first biodiversity loan goes to Henderson Land for Central Yards

Henderson Land Development secured the first biodiversity loan in Hong Kong, receiving around HK$100 million (US$12.8 million) from HSBC and Hang Seng Bank for green initiatives at Central Yards, the company’s flagship mixed-use development on the New Central Harbourfront. This loan would provide a “scalable blueprint” for companies to achieve their sustainability goals and enhance Hong Kong’s position as a leading international sustainable finance centre, according to the two banks. The proceeds would support smart systems to support the maintenance and management of a newly established urban forest populated by native plant species, as well as surveys, assessments and monitoring of urban biodiversity at the project, according to the statement released by the developer and the banks. The loan showed how sustainable financing could “help businesses integrate urban development with ecological development”, said Matthew Hung, head of global corporates in Hong Kong for HSBC, adding that it would also enhance “Hong Kong’s position as a leading international sustainable finance centre”. The parties did not disclose the loan size, but it was estimated at about HK$100 million, according to sources familiar with the matter. As part of the project, more than 400 trees and about 280 plant species would be planted across multiple gardens, the parties said. HSBC’s sustainability survey showed that around 60 per cent of Asian businesses now identified climate transition as a key strategic focus, Hung said. Central Yards has more than 300,000 sq ft of open green space, including Central’s largest elevated garden, spanning over 160,000 sq ft. Andrew Fung, executive director and chief financial officer of Henderson Land, said the new loan aligned with the company’s capital strategy and its sustainability ambitions. Some tenants would prefer assets with ESG (environmental, social and governance) features, such as a green roof, said Martin Wong, director and East Asia asset-management leader at UK-based international engineering firm Arup. These “ESG features and initiatives could help” asset owners and landlords to fill office spaces amid soft demand, he added. Vacancies in Hong Kong’s premium office market edged up to 13.5 per cent in March from 13.4 per cent a month earlier, as the vacancy rate in Kowloon East surged to 20.4 per cent from 19.5 per cent, according to data compiled by JLL. Meanwhile, Central, Hong Kong East and Tsim Sha Tsui recorded lower vacancy rates, the data showed. The first phase of Central Yards is scheduled to open in the second half of 2027, with the second phase slated for completion in 2032. Jane Street Asia will serve as the anchor tenant of Central Yards, after the quant trading firm signed a lease in June for 223,437 sq ft in the building at HK$137 per square foot per month, or HK$30.6 million per month, excluding fees, making it one of the largest leasing transactions in Central in decades. Henderson paid a record-setting HK$50.8 billion for a 50-year land grant to the prime site in 2021. Henderson said in June that more than 70 per cent of the first phase of the office and ancillary space at Central Yards had been leased, with the remaining areas “attracting strong interest from leading multinational companies”.