Allianz Real Estate has agreed to pay SGD537.3m (鈧�344.3m) for a 20% stake in Keppel REIT鈥檚 Ocean Financial Centre building in Singapore.
Rushabh Desai, the CEO Asia-Pacific at Allianz Real Estate, said: 鈥淭his is our first direct core office exposure to Singapore. Our prior exposure is via funds and co-investment.鈥�
He told 91传媒在线: 鈥淚nvestment in an income producing prime asset in a market like Singapore, which has a strong rental outlook, brings about a good balance to our office portfolio.鈥�
The 鈧�60bn reeal estate manager has been monitoring the Singapore office market for the last two years, looking for an appropriate opportunity. 鈥淲e started exploring this transaction in second quarter of this year,鈥� he said.
鈥淭he acquisition is aligned with our approach of creating a quality portfolio of core assets in 24x7 cities,鈥� said Desai.
He added: 鈥淜eppel REIT has built an excellent portfolio and a best-in-class team. We look forward to future collaborations, especially on new transactions, with them.鈥�
The transaction, due to close by the end of December, was done at a 16.8% premium above Keppel REIT鈥檚 historical purchase price of SGD460.2m.
Tan Swee Yiow, CEO of Keppel REIT Management Limited, said divestment of the 20% stake was part of the trust鈥檚 ongoing portfolio optimisation effort.
鈥淚n line with our commitment to deliver sustainable total returns to unitholders, we are pleased that we will be realising approximately SGD77.1m of capital gains,鈥� he said.
This translates to an attractive net asset-level return of 8.3% per annum over the holding period, he said.
Post-settlement, Tan said proceeds from the divestment would provide the manager with the financial flexibility to continue with several initiatives, including retiring debt and buying back its listed units.
