KEPPEL Reit, the second biggest office property trust in Asia excluding Japan, is seeking buyers for its 30-storey Prudential Tower in Singapore's Central Business District, according to two people familiar with the matter.
Keppel Reit owns a 92.8 per cent stake in the tower, which was valued at $490 million as of Dec 31 by independent valuers, according to the company's filing on Jan 20.
The property is fully occupied, that report showed.
"Keppel Reit does from time to time receive interest to acquire our properties," the trust said in an e-mailed response to Bloomberg News queries.
"We will consider all potential divestments and acquisitions, and will make an announcement if and when any such deals materialise."
The Singapore-based real estate investment trust (Reit) is looking to sell older assets to help fund acquisitions, chief executive officer Ng Hsueh Ling told reporters on Jan 20.
The Reit may approach Keppel Land, its biggest shareholder, to buy the developer's stake in the city's Marina Bay Financial Centre Tower 3, she had said.
The acquisition of the building in the Marina Bay area, the city's new financial centre, could be funded by debt, Singapore-based analysts Kai Yip and Regina Lim at Standard Chartered said in a note to clients on Jan 21.
"We believe K-Reit could fund a potential $1.24 billion acquisition from its sponsor with 100 per cent debt if it divests Prudential Tower for $490 million," they said.
For Prudential Tower, Keppel Reit is seeking $2,400 per square foot, one of the people said, declining to be identified as the information is private.
The price would value the trust's stake at $531 million, based on the 221,241 sq ft of space it owns in the building, according to the filing on Jan 20.
Keppel Reit reported a 1.4 per cent increase in distributable income to 7.88 cents a share for the year ended Dec 31.
The trust's Singapore office properties are fully occupied, the company said on Jan 20.
Source: Straits Times, 28 Jan 2014