Singapore’s largest lender DBS has extended a 10-year, 8.8 billion yen ( US$57 million ) social loan to Parkway Life REIT, marking the bank’s first social loan in the healthcare sector and underscoring the growing role of sustainable finance in addressing demographic challenges across Asia.

The facility qualifies as a social loan under Parkway Life REIT’s newly established Sustainable Finance Framework, for which DBS acted as sole sustainable finance adviser.

The framework, independently verified and aligned with internationally recognized social loan principles, enables the Reit to channel capital towards projects delivering measurable environmental and social outcomes across its portfolio in Singapore, Japan and Europe.

Proceeds from the loan will be used to finance elderly care facilities in Japan, where demographic pressures are intensifying. In 2024, Japan’s population aged 65 and above reached a record 36.25 million, accounting for roughly 30% of the population, three times the global average.

The rapid ageing trend has heightened demand for quality nursing homes and long-term care infrastructure, positioning healthcare real estate as a critical component of social resilience.

Community impact

Yong Yean Chau, CEO of Parkway Trust Management, describes the transaction as a milestone in the Reit’s sustainable finance journey, enabling capital to be directed towards assets that generate both stakeholder value and community impact.

Impact metrics tied to the loan include the number of nursing home accommodations supported and the number of beneficiaries of Parkway Life REIT’s elderly care programmes.

Beyond social infrastructure, the broader framework also covers energy efficiency upgrades, renewable energy adoption and climate-resilient building improvements, reinforcing the dual environmental and social focus of sustainable financing.

For DBS, the deal reflects a broader shift in sustainable finance beyond climate mitigation. The bank says the transaction demonstrates how structured frameworks can rapidly translate sustainability commitments into deployable capital, particularly in sectors such as healthcare where infrastructure gaps are closely tied to long-term demographic trends.

“Sustainable finance goes beyond addressing environmental challenges. It is increasingly also about delivering meaningful social impact,” says Shilpa Gulrajani, head of sustainable finance, institutional banking group, at DBS. “By directing funding to quality elderly care facilities, social loans expand access to essential healthcare infrastructure and support Japan’s long-term demographic needs.”