Keppel’s real estate arm has agreed to sell a 51% stake in the Keppel South Central commercial building in Singapore to related party Keppel REIT for approximately S$611m (€425.6m).
The deal involves Keppel REIT paying S$149m for the equity stake in property-holding company K-Commercial and approximately S$462m to repay an intercompany loan.
Once completed, Keppel will retain a 49% interest while continuing to provide property management and leasing services to the 33-storey asset at 10 Hoe Chiang Road.
The transaction includes a call option enabling Keppel to buy back the 51% equity interest for a nominal amount upon the expiry of a 70-year term.
Louis Lim, CEO, real estate at Keppel, said: “Since its redevelopment in 2020, Keppel South Central has delivered strong returns including fair value gains, generating more than $380m in total profits for Keppel. The transaction is in line with Keppel’s asset monetisation strategy, enabling us to unlock capital that can be redeployed into higher-return opportunities, reduce debt and reward shareholders.
“The transaction will also bring Keppel South Central into Keppel’s asset management ecosystem, strengthening Keppel REIT’s Singapore portfolio, while contributing to the growth of our funds under management.”
Lim said by retaining a 49% stake alongside, Keppel will continue to participate in the asset’s long-term growth, “while the option to re-acquire the 51% stake preserves optionality to unlock further upside from this prime freehold asset”.
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