Keppel REIT has agreed to acquire an additional one-third stake in Marina Bay Financial Centre Tower 3 ( MBFC Tower 3 ) in Singapore for S$1,453 million ( US$1.12 billion ), or approximately S$3,268 per square foot.    

The deal with Sageland Pvt Ltd, a subsidiary of Hongkong Land, represents a 1% discount to the property’s independent valuation ( based on the one-third interest ) of S$1,467.3 million.  Following the completion of the deal, Keppel REIT will increase its stake in the property to two-thirds.

Located in the heart of Marina Bay, the core of Singapore's Central Business District, the 46-storey MBFC Tower 3 is a premium Grade A office building with an aggregate net lettable area of 1.3 million square feet.  

Marina Bay Financial Centre Tower 3.

DBS is a key tenant at MBFC Tower 3, which is supported by a diverse and strong tenant base, including blue-chip corporations across financial institutions, legal services, and technology and media companies. The property enjoys a 99.5% committed occupancy as at September 30 and a weighted average lease expiry of 3.5 years. Sustained demand for quality office space, coupled with the absence of new office supply in the Marina Bay area, is expected to support potential rental growth and long-term capital appreciation.

Chua Hsien Yang, chief executive officer of Keppel REIT’s manager, says: “The exercise of our pre-emptive right to acquire the incremental one-third share of MBFC Tower 3 presents a rare opportunity to increase our interest in an iconic asset in the prime Marina Bay area, with potential for future rental upside and capital appreciation over the long term. This acquisition reflects our confidence in Singapore’s prime office sector and reinforces our focus to anchor and continue to grow our portfolio of Grade A commercial assets in the market.”

The acquisition will be completed on December 31. Post-completion, Keppel REIT’s portfolio value will increase to S$11.2 billion across 14 properties in Singapore ( 79.0% ), Australia ( 17.8% ), South Korea ( 2.4% ), and Japan ( 0.8% ).

In connection with the acquisition, Keppel REIT has launched a preferential offering of new units to raise gross proceeds of S$886.3 million. Unitholders who are entitled to participate in the preferential offering will be offered 23 new units for every 100 existing units held, at an issue price of S$0.96 per new unit.

The proceeds of the offer will be used to partially fund the acquisition and its related costs.