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Keppel REIT has agreed to acquire a 100% stake in Keppel Bay Tower from Keppel Land for S$667 million (US$500 million). The property is a Grade-A office building in the Keppel Bay waterfront precinct of the HarbourFront area in Singapore.
The deal was based on an agreed property value of S$657.2 million, or approximately S$1,700 per square foot, which takes into account rental support of up to S$3.2 million for vacant units and leases expiring in the 18 months post-completion.
The S$667 million acquisition cost includes the estimated net asset value, transaction costs and equity fund raising costs.
The acquisition, targeted to be completed in the second quarter of 2021, will be funded with debt and proceeds from an equity fund raising which is intended to comprise a private placement.
Completed in 2002, Keppel Bay Tower has a total net lettable area (NLA) of about 386,600 square feet and comprises an 18-storey tower block and a six-storey podium block. Asset enhancement works, including the refurbishment of the office lobby with modern fittings and quality finishes, were completed in 2019.
Keppel Bay Tower is strategically located in the world-class Keppel Bay waterfront precinct and is part of Singapore’s Greater Southern Waterfront, which will be transformed into a new major gateway and location for urban living along Singapore’s southern coast.
It is the first commercial development in Singapore to be certified as a Green Mark Platinum (Zero Energy) building by the Building and Construction Authority of Singapore. Earlier in January 2020, it earned the distinction of being Singapore’s first commercial development to utilize renewable energy to power all its operations, including the offices of tenants in the building.
The tower is home to a number of major companies and multinational corporations such as the Keppel Group, BMW Asia, Mondelez International, Pacific Refreshments and Syngenta. As at September 30 2020, the property has a committed occupancy of 99.2% and a weighted average lease expiry of 3.3 years by NLA.
