Chelsea Barracks becomes “most sustainable development in Europe” via £400m Green Loan

Real estate investment specialist and developer Qatari Diar has secured a significant £400m Green Loan for the development of its Chelsea Barracks site.

The interest rate risk on the loan was fully hedged through an innovative green derivative structured on the basis of the building’s LEED certification status. The financial package was secured for the completion of the prime central London developments’ Phase 4.

Phase 4 will provide a further 32,000 sq ft of amenity space serving all residents of the development as well as 97 new apartments. The loan reflects lenders’ confidence in both the Chelsea Barracks vision and Qatari Diar’s track record within the London luxury real estate market and as a “global leader” in sustainable real estate.

The financing is provided by a consortium of five lenders: Credit Suisse, Standard Chartered, Allied Irish Bank (GB), Qatar National Bank and National Bank of Kuwait. It is aligned with the Green Loan Principles (2020) as set out by the Loan Market Association and ESG derivatives standards.

Chelsea Barracks achieved this qualification as it met strict criteria through the masterplan’s 2021 LEED Platinum certification. Sustainability has been a core driving factor in the evolution of the Chelsea Barracks masterplan delivering a comprehensive framework for green building design.

According to the developer, Chelsea Barracks is now the “most sustainable development in Europe”, and one of only 16 developments in the world to reach this standard.

Tariq Al Abdulla, chief development & project delivery officer (Europe & America), Qatari Diar, commented: “Securing the development loan for Phase 4 of Chelsea Barracks, and having it classified as a Green Loan, is an important milestone for the project and one we are extremely proud of.

“Through the strength of the masterplan and its green objectives and despite the challenges of the current climate, we have been successful in receiving the financing that will be instrumental in the completion of Chelsea Barracks.”

Credit Suisse acted as lead coordinator, Standard Chartered as green loan coordinator and green hedge coordinator for the ESG Derivative. JLL acted as Qatari Diar’s financial advisor, and Bryan Cave Leighton Paisner as its legal advisor. Dentons acted as lenders’ legal advisor.