"The new Framework has been carefully designed to reward developers who actually deliver, not just aspire to deliver, impactful projects."
- Paul Frost, managing director of Puma Property Finance
Puma Property Finance has launched a new Impact Lending Framework, providing support to property developers who are implementing measures that deliver meaningful and impactful change.
The Framework provides a new lending offering for developers of residential and commercial real estate and provides financial incentives to developers who deliver high levels of sustainability or social impact.
The Framework sets out criteria under which prospective development projects can qualify as an Impact Loan. The criteria have been designed to make use of independent, industry-accredited measures, which will be subject to third-party verification.
Qualification as an Impact Loan will provide financial benefits to borrowers in the form of a fee reduction on final repayment of the loan. Borrowers will receive either 0.5% or 1.0% of the total drawn loan amount as a fee reduction, and loans will qualify under two sets of criteria:
• Sustainability Criteria – these criteria have been designed to encourage the adoption of sustainable methods of construction, and thoughtful design to encourage efficient long-term building usage.
• Social Impact Criteria – encourage investment into areas of higher deprivation or to support the provision of increased affordable housing.
Developments in the build-to-sell, build-to-rent, co-living and retirement living sectors will fall within the scope of the Residential Impact Loan framework. Developments in all other sectors will fall within the Commercial Impact Loan framework.
Residential loans must meet a minimum EPC of B for all units and a minimum Silver rating under the NextGeneration Project criteria, with an additional benefit for achieving Gold rating.
Commercial Loans must attain EDGE Certificate level, with an additional benefit for achieving EDGE Advanced level.
The Social Impact Criteria have been designed to align with the Loan Market Association Social Loan Principles. Criteria are based on the locality of the proposed development, with projects qualifying if – at the time of loan approval – they are located within local authority wards in the top three deciles of deprivation, according to independent government statistics.
For residential loans, an alternative means of qualification applies where a minimum of 50% of units will be classified as affordable housing.
In order to ensure objective application of the Framework, Puma has partnered with independent third parties JLL and Sintali. JLL currently undertake this in their role as Secretariat of NextGeneration, an initiative between Homes England, the UK Green Buildings Council, Lloyds Bank and JLL focused on UK housebuilders.
Sintali is a specialist in EDGE certification, a green building certification system focused on making buildings more resource efficient with operations globally. as SGS to deliver a streamlined certification experience for clients.
Paul Frost, managing director of Puma Property Finance, commented: “We are immensely proud to be launching our Impact Lending Framework, which is the culmination of many months of thought and consultation and follows our University College London partnership that we announced last year.
“We take both our environmental and social responsibilities seriously at Puma and believe property lenders are uniquely placed to incentivise the adoption of more sustainable and impactful practices within the built environment. The new Framework has been carefully designed to reward developers who actually deliver, not just aspire to deliver, impactful projects. It utilises independent, industry-accredited criteria with external, third-party verification from global leaders in their field.
“This Framework is our next step towards moving the dial and we sincerely hope it will be the encouragement developers and other lenders need to take that next step too.”
