Keppel Real Estate Investment Trust (Reit) is divesting a 20 per cent stake in Ocean Financial Centre to Allianz Real Estate for $537.3 million, but it will still retain a 79.9 per cent interest in the property.
The deal will be the first core office acquisition in Singapore by Allianz, the German insurer's property investment arm.
Independent valuer Cushman and Wakefield VHS valued the property at about $2.62 billion as of Nov 15, or $525.3 million based on 20 per cent of the property.
The purchase price of $537.3 million is 16.8 per cent or $77.1 million higher than the historical purchase price of $460.2 million, and net gain is estimated at $6.9 million after deducting transaction costs, said Keppel Reit Management yesterday.
The manager believes the sale will help it realise capital gains for unit holders, while maintaining exposure to a strengthening Singapore office market. It added that the proceeds will allow it to continue its unit buyback programme, distribute capital top-ups, pare debt or fund growth through re-investments.
In addition, a divestment fee of $2.7 million will be paid to the manager in accordance with terms of the trust deed.
What independent valuer Cushman and Wakefield VHS valued the property as of Nov 15.
Ocean Financial Centre is a 43-storey Grade A office tower at the intersection of the Raffles Place and Marina Bay financial precincts, with retail space on its ground floor and basement level.
The property, with its distinctive plant-covered external walls, has a total net lettable area of 877,635 sq ft and a committed occupancy rate of 95.5 per cent as of Sept 30.
Mr Stuart Crow, head of Asia-Pacific capital markets at real estate consultancy JLL, said: "This transaction is indicative of global investors' confidence in Singapore, thanks to its ongoing political stability, robust infrastructure and strong market fundamentals.
"Singapore's prime office rents have climbed a total of 18 per cent over six consecutive quarters since 2017."
Keppel Reit units closed down 0.86 per cent at $1.15 yesterday.