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Keppel REIT will acquire a one-third stake in Marina Bay Financial Centre (MBFC) Tower 3 from Keppel Land for $1.25 billion, revealed media reports.
The price translates to $2,790 psf according to two property consultancies, but each of their market valuations are different. Savills estimates it to be $1.276 billion, while Cushman & Wakefield provided a higher figure of $1.281 billion.
“The acquisition of MBFC Tower 3 and the divestment of Prudential Tower will enhance and transform Keppel REIT’s portfolio in terms of age and quality of assets, as well as improve the portfolio property fundamentals,” said Keppel REIT’s CEO Ng Hsueh Ling.
In January, she announced that the trust was divesting older properties to help fund acquisitions. Subsequently in May, the company sold its majority interest in the 30-storey Prudential Tower for $512 million.
According to Credit Suisse, the sale of Keppel REIT’s 92.8 percent stake in Prudential Tower, which has a net lettable area of 221,080 sq ft, represent a 4.5 percent premium over its $490 million or $2,216 psf valuation.
“On a pro-forma basis, the sale is expected to reduce FY2013’s distribution per unit by 2.7 percent to 7.67 cents, while leverage would fall from 42.1 percent to 38.8 percent, assuming S$425 million of the sale proceeds were used to pare down debt,” said Credit Suisse.
The building was purchased by Epic Land, a joint venture between Centurion, which holds a 15 percent stake, KOP (25 percent), KSH Holdings (28 percent) and Lian Beng (32 percent). The sale is targeted for completion on 26 September, added the financial services company.
Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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