Keppel Corp has proposed to sell its indirectly owned Keppel Bay Tower, an office building located in HarbourFront, for $657.2 million to Keppel REIT.
The transaction is expected to generate net sale proceeds of $597 million.
Keppel says it will make an estimated gain of about $14.6 million from this transaction, including fair value adjustment to be recognised in 2H 2020.
Keppel Bay Tower Pte Ltd (KBTPL) is currently the sole owner of Keppel Bay Tower.
KBTPL is an indirect subsidiary of Keppel Land, which in turn, is a subsidiary of Keppel.
Following the proposed divestment, Keppel Land will continue to be the property manager of Keppel Bay Tower.
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The transaction is subject to the approval of the unitholders of Keppel REIT at an extraordinary general meeting, as well as approvals from the relevant authorities.
Upon approval, the transaction is expected to be completed in 2Q 2021.
Ng Ooi Hooi, president (Singapore) of Keppel Land, says the proposed divestment of Keppel Bay Tower is in line with Keppel’s Vision 2030.
The transaction will allow the Keppel Group to unlock capital from Keppel Bay Tower and reallocate it to seek new growth opportunities, he adds.
Moreover, 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,” Ng says in a Dec 23 statement.
As at 9.57 am, Keppel was down 1 cent or 0.2% at $5.29 with 565,700 shares changed hands.
