K-REIT Asia to acquire one-third interest in Marina Bay Financial Centre

In turn, signed agreement with Keppel Land for S$573mln purchase of Keppel Towers and GE Tower.

K-REIT Asia has entered into a conditional share purchase agreement with Bayfront Development Pte. Ltd., a wholly-owned subsidiary of Keppel Land Limited (Keppel Land), for the acquisition of a one-third interest in Phase One of Marina Bay Financial Centre (MBFC Phase One) at an agreed value of approximately S$1,426.8 million (inclusive of rental support).

At the same time, as part of the asset swap, K-REIT Asia has signed a conditional sale and purchase agreement with Mansfield Developments Pte Ltd, a wholly-owned subsidiary of Keppel Land, for the divestment of Keppel Towers and GE Tower (KTGE) at an agreed value of S$573.0 million, which is above the valuation of S$540.7 million as at 31 December 2009, according to a Keppel Land report.

MBFC Phase One comprises two office towers, Marina Bay Financial Centre Towers 1 & 2, with a total net lettable area (NLA) of about 1.65 million sf, Marina Bay Link Mall with a retail NLA of about 94,500 sf and 684 carpark spaces. Fully committed, major tenants at MBFC Towers 1 & 2 include Standard Chartered Bank, Barclays Capital, BHP Billiton, Nomura, Macquarie, American Express and Prudential.

After the asset swap, K-REIT Asia's portfolio asset size will increase from S$2.5 billion to approximately S$3.4 billion. The asset swap is expected to be completed no later than 31 December 2010.

The acquisition of the one-third interest in MBFC Phase One will be funded by a combination of the sale proceeds from the divestment of KTGE, new borrowings and part of the proceeds from K-REIT Asia's November 2009 rights issue.

Ms Ng Hsueh Ling, CEO of K-REIT Asia Management Limited, said, "With the acquisition of MBFC Phase One, 90% of K-REIT Asia's portfolio will be strategically located within Singapore's prime Raffles Place and the Marina Bay precinct.

"The asset swap will upgrade K-REIT Asia's portfolio of prime Grade A office assets without having to raise additional equity, and will improve K-REIT Asia's cashflow resilience while maintaining a healthy balance sheet."

The bundled transaction is subject to the approval of the minority unitholders of K-REIT Asia at an extraordinary general meeting.

The agreements for both the acquisition and divestment were negotiated at arm's length on a willing-buyer willing-seller basis. The one-third interest in MBFC Phase One property has, as at 30 September 2010, on an open market value basis and inclusive of a rental support of up to S$29 million, been valued at S$1,427.0 million by Savills (Singapore) Pte Ltd (Savills) and S$1,433.0 million by Knight Frank Pte Ltd (Knight Frank).

Similarly, KTGE's open market value as at 30 September 2010, based on a highest value and best use basis as residential use, has been appraised at S$573.0 million by Savills and at S$570.0 million by Knight Frank.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia