“With limited CBD office supply and a continued flight-to-quality trend by tenants, this suggests a positive backdrop. The purchase price implies a valuation of $3,268 psf on NLA, 4.7% higher than the valuation of its existing stake at $3,123 psf,” he adds.
Krishna Guha of Maybank Securities has downgraded Keppel REIT from “buy” to “hold”, following the acquisition of an additional one-third stake in MBFC Tower 3, on worries over DPU dilution, although he remains optimistic that potential upside will eventually manifest.
In his Dec 12 report, Krishna points out that upon completion of the acquisition, Keppel REIT’s Singapore portfolio weighting will increase to 79% from 75.8%. Committed occupancy stands at 99.5% with a WALE of 3.5 years. The underlying land has a remaining lease of 80.2 years. Passing rent is around 10% below the precinct’s average rent (JLL).
