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Keppel Land revealed that the consideration for the sale was based on an agreed property value of $657.2 million, including rental support of up to $3.2 million.
Keppel Land, via its fully-owned unit Agathese, is divesting its 100% interest in Keppel Bay Tower to Keppel REIT.
In an SGX filing on Wednesday (23 December), Keppel Land revealed that the consideration for the sale was based on an agreed property value of $657.2 million, including rental support of up to $3.2 million.
It noted that the resultant gain from the transaction is estimated to be around $14.6 million, inclusive of fair value adjustment to be recognised in the second half of 2020.
“Subject to accounting adjustments upon completion, the divestment is expected to generate net sale proceeds of $597 million, after taking into account transaction fees and rental support.”
Located within the prime HarbourFront area, Keppel Bay Tower is a Grade A office development comprising an 18-storey tower block and a six-storey podium block. It has a total net lettable area of around 386,600 sq ft and an occupancy rate of 99.2% as at end-September.
Its tenants include major companies as well as multinational corporations like the Keppel Group, Mondelez International, BMW Asia, Syngenta Asia Pacific and Pacific Refreshments (Coca Cola).
Keppel Bay Tower was certified by the Building and Construction Authority as a Green Mark Platinum (Zero Energy) building earlier this month. It is also the first commercial development in Singapore to be fully powered by renewable energy.
“The divestment of Keppel Bay Tower is in line with Keppel’s Vision 2030 and will allow the Keppel Group to unlock capital from Keppel Bay Tower and reallocate it to seek new growth opportunities,” said Ng Ooi Hooi, President (Singapore), Keppel Land.
“At the same time, the transaction will augment Keppel REIT’s portfolio of Grade A commercial assets. Through Keppel Land’s interest in Keppel REIT, Keppel Land will continue to enjoy the rental income and potential capital value appreciation of Keppel Bay Tower, as well as benefit from the growth of the REIT.”
The transaction, which is subject to the approval of Keppel REIT’s unitholders at an extraordinary general meeting, is expected to be completed in the second quarter of 2021.
Keppel Land will continue to be Keppel Bay Tower’s property manager even after the divestment.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg