MEDIA RELEASE Keppel REIT strengthens foothold in Singapore’s prime financial district with the acquisition of a one-third interest in Marina Bay Financial Centre Tower 3 Singapore, 18 September 2014 – Keppel REIT Management Limited, as the Manager of Keppel REIT (“ Keppel REIT ”), is pleased to announce that Keppel REIT has entered into a conditional share purchase agreement with Bayfront Development Pte. Ltd., a wholly-owned subsidiary of Keppel Land Limited, to acquire a one-third interest in the two-year-old Marina Bay Financial Centre Tower 3 ( “ MBFC Tower 3 ” ) at an agreed value of S$1,248.0 million or S$2,790 psf. Excluding the five-year rental support of up to an aggregate amount of approximately S$49.2 million, the net purchase price will be S$1,198.8 million or S$2,680 psf. The agreed value for MBFC Tower 3 is negotiated on a willing-buyer willing-seller basis and is supported by the independent valuations by Cushman & Wakefield VHS Pte Ltd ( “ Cushman ” ) and Savills Valuation and Professional Services (S) Pte Ltd (“ Savills ” ). The independent valuations for MBFC Tower 3 by Cushman and Savills as at 18 August 2014 are at S$1,281.0 million and S$1,276.0 million respectively. Strategically located in the heart of Marina Bay, the new downtown core of Singapore’s Central Business District, the 46-storey MBFC Tower 3 has a total net lettable area ( “ NLA ” ) of 1,341,980 sq ft, of which the office component is approximately 1.3 million sq ft and the remaining is ancillary retail space. MBFC Tower 3’s committed occupancy was approximately 94% as at 31 August 2014. Its stellar line-up of office tenants includes DBS Bank, WongPartnership, Rio Tinto, Booking.com, McGraw-Hill, Mead Johnson and Lego. Ms Ng Hsueh Ling, Chief Executive Officer of the Man ager, said, “Singapore , supported by positive economic fundamentals, continues to be a sought-after destination for businesses and multinational corporations seeking to deepen and expand their presence in the fast-growing Asian region. “MBFC Tow er 3, with its excellent location and premium office building specifications, will be a strategic addition to Keppel REIT’s portfolio. The acquisition of MBFC Tower 3 and the divestment of Prudential Tower will enhance and transform Keppel REIT’s portfolio in terms of age and quality of assets, as well as improve the portfolio property fundamentals to ensure long-term sustainable income to Unitholders. ” 1
The Manager believes that the accretive (1) acquisition will be beneficial to Unitholders of Keppel REIT. The acquisition , which is consistent with Keppel REIT’s investment and growth strategy, will: strengthen Keppel REIT’s presence and position as the leading landlord of premium Grade A office buildings in Singapore’s business and financial district; improve the average portfolio age to approximately 5.5 years (2) , reducing the need for extensive asset enhancement initiatives or large capital expenditure; lengthen the NLA weighted average lease expiry ( “ WALE ” ) for the top 10 tenants to 9.2 years (3) , providing Unitholders long-term income stability and resilience; upgrade and enhance Keppel REIT’s portfolio through the divestment of a 16 -year-old property, Prudential Tower, for a two-year-old building, MBFC Tower 3; enhance the quality of Keppel REIT’s t enant base and increase the total number of tenants to 271, providing greater diversification to income streams; as well as give Keppel REIT an ownership interest in all the three office towers at Marina Bay Financial Centre, providing the Manager greater flexibility to optimise leasing and operational efficiencies. The Manager intends to fund the acquisition of the two-year-old MBFC Tower 3 with (i) part payment by way of issuing Keppel REIT Units to Keppel Land (4) , (ii) net proceeds from the placement of 195,000,000 new Units (5) , (iii) part of the sales proceeds from the divestment of the 16-year old Prudential Tower (6) , and (iv) additional borrowings. Post-acquisition, Keppel REIT is expected to have an aggregate leverage ratio of approximately 43.8% (7) . Following the completion of the divestment of Prudential Tower and acquisition of MBFC Tower 3, Keppel REIT’s assets under management will be over S$8.1 billion. Approximately 93% of Keppel REIT’s Singapore portfolio will be located within the prime Raffles Place and Marina Bay financial precincts. The acquisition, consideration Units to be issued to Keppel Land as well as the whitewash resolution are subject to the approval of Unitholders of Keppel REIT at an extraordinary general meeting. Please refer to the Manager’s SGX announcements for more details. About Marina Bay Financial Centre Tower 3 Designed by world-renowned New York-based architect Kohn Pedersen Fox Associates, MBFC Tower 3 is a newly completed premium Grade A office building with large column-free and symmetrical floor plates of approximately 30,000 sq ft to 45,000 sq ft which optimise the efficient use of space as well as offer panoramic views of the Marina Bay. Located in the heart of prime waterfront land in Singapore’s fi nancial district, MBFC Tower 3 is a 46-storey commercial building with a total NLA of 1,341,980 sq ft, of which the office component is approximately 1.3 million sq ft and the remaining is ancillary retail space. MBFC Tower 3 is part of the Marina Bay Financial Centre integrated development (“ MBFC Development ”) which comprises three office towers; two resident ial developments, Marina Bay Residences and Marina Bay Suites; and a subterranean retail mall, Marina Bay Link Mall. The MBFC Development is connected to the other developments in the Marina Bay precinct and the Raffles Place MRT interchange and the Downtown MRT stations via an underground pedestrian network. 2
Positioned as Asia’s Best Business Address™, the MBFC Development is in close proximity to a wide range of Singapore landmarks including the Marina Bay Sands integrated resort, Gardens by the Bay, Esplanade – Theatres on the Bay, international and boutique hotels, luxury residences as well as a range of dining and retail options. MBFC Tower 3: Key Property Information Description 46-storey premium Grade A commercial building with ancillary retail space Total NLA 1,341,980 sq ft No. of tenants (8) 49 Principal tenants (8) DBS Bank, WongPartnership, Rio Tinto, McGraw-Hill, Booking.com, Mead Johnson and Lego No of car park lots 357 Tenure 99 years commencing from March 2007 Building age Two years Occupancy (8) Approximately 94% WALE (by NLA) (8) 7.0 years Valuation of the Cushman: S$1,281.0 million MBFC Tower 3 Interest (9) Savills: S$1,276.0 million (1) On a pro forma basis for the financial year ended 31 December 2013, distribution per Unit will accrete from 7.88 cents to 7.89 cents. This has assumed that Prudential Tower is divested and part of the sales proceeds is used to partially finance the acquisition of the one-third interest in MBFC Tower 3. (2) Excludes the 92.8% interest in Prudential Tower and includes the one-third interest in MBFC Tower 3. (3) Excluding the new office tower to be built on the site of the Old Treasury Building, the WALE (by NLA) for the top 10 tenants is expected to be 6.9 years. (4) The Units issued to Keppel Land as part payment, amounting to S$185.0 million, shall be issued on date of legal completion and priced based on the preceding 10-day volume weighted average price of Keppel REIT Units. (5) Placement of 195,000,000 new Units at the issue price of S$1.17 represents a 2.8% discount to the adjusted volume weighted average price of S$1.2034 per Unit done on the SGX-ST for the preceding market day on 17 September 2014 and up to the time the Subscription Agreement was signed on 18 September 2014. (6) On 15 May 2014, Keppel REIT announced the divestment of its 92.8% interest in Prudential Tower for S$512.0 million. The sale price is 4.5% above the property’s last valuation of S$490.0 million as at 28 April 2014, and a 46.7% premium over Keppel REIT's original purchase price of the property of S$349.1 million. The divestment is expected to be completed on 26 September 2014. (7) Computed based on the exchange rate of A$1.00 = S$1.174 and includes the one- third share of the borrowings recorded in CBDPL’s books . (8) As at 31 August 2014. (9) As at 18 August 2014. - End - For more information, please contact: Media Relations Investor Relations Ms Frances Teh Ms Grace Chia Assistant Manager Senior Manager Group Corporate Communications Investor Relations & Research Keppel Corporation Limited Keppel REIT Management Limited Tel: (65) 6413 6437 / (65) 9842 6853 Tel: (65) 6433 7622 Email: frances.teh@kepcorp.com Email: grace.chia@keppelreit.com The materials are also available at www.keppelreit.com, www.keppelland.com and www.kepcorp.com . 3
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