Staff Reporter
Published:
Photo by Alaric Sim via Pexels
The 33-storey Grade A building in Tanjong Pagar is priced at $626.2m.
Keppel Real Estate Investment Trust (REIT) has signed an agreement to acquire a 51% interest in Keppel South Central from its sponsor, Keppel Ltd, its manager announced.
The deal values the property at $626.2m, equivalent to approximately $2,350 per square foot (sq f) on a 70-year leasehold basis.
The property is a 33-storey Grade A commercial building located in the heart of Tanjong Pagar, comprising office space and retail, event, and flexible workspace offerings.
The acquisition offers an attractive initial property yield of 4.3% and a pro forma distribution per unit accretion of 2.01%, the manager added.
Keppel REIT will receive a guaranteed monthly income of $2.23m from the vendor for up to five years, supported by existing rental income at the property.
As of 30 September, committed leases and leases undergoing documentation covered 52.7% of net lettable area at an average monthly rent of $11.30 per sq f, above the $11.15 assumed under the arrangement.
The proportion rose to about 60% by 15 October, with potential for higher rents from available mid-to-high floors, the manager added.
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