Keppel Reit to buy 75% stake in Sydney mall for $334.8 million in first foray into retail sector
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Keppel Reit is acquiring a 75 per cent interest in Top Ryde City Shopping Centre, a retail mall in Sydney, Australia, marking its strategic expansion into the retail sector.
PHOTO: KEPPEL
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SINGAPORE - Keppel Real Estate Investment Trust (Reit) has entered into an agreement to acquire a 75 per cent interest in a freehold retail mall in Sydney, Australia, for A$393.8 million (S$334.8 million).
The manager’s chief executive Chua Hsien Yang on Oct 8 said this marks the Reit’s expansion into the retail sector, as Top Ryde City Shopping Centre will be its first pure-play retail asset.
“The diversification allows Keppel Reit to benefit from enhanced portfolio resilience as Australian retail malls offer attractive yields, with suburban retail assets demonstrating resilience and strong growth potential supported by long-term consumption growth and population increase,” Mr Chua said.
He added the acquisition will be accretive to the Reit’s distribution per unit (DPU), and is expected to enhance its overall returns while complementing its Singapore office-focused portfolio.
Top Ryde City Shopping Centre is a high-quality, freehold mall located in the city of Ryde. It is part of a mixed-use development that includes a residential component and offers an aggregate lettable area of 77,054 sq m, with 2,739 carpark spaces.
With non-discretionary tenants accounting for 77 per cent of the mall’s gross rental income, the property is anchored by strong-performing tenants such as Aldi, Big W, Coles, Kmart and Woolworths.
The manager said the mall is a defensive asset with a high committed occupancy rate of 96 per cent and a long weighted average lease expiry of 4.2 years by committed gross rent.
It is expected to deliver a fully leased initial property yield of 6.7 per cent and pro forma adjusted DPU accretion of 1.34 per cent.
The acquisition will be funded through debt, equity and perpetual securities. It is scheduled to be completed by the first quarter of 2026.
In a separate announcement, the manager said Keppel Reit will issue around 112.5 million new units via a private placement to raise $113 million, of which some $109.6 million will go to the acquisition and $3.4 million for fees and expenses related to the private placement.
After the acquisition, Keppel Reit’s portfolio value will be increased to $9.8 billion across 14 properties in Singapore (76 per cent), Australia (20.2 per cent), South Korea (2.9 per cent) and Japan (0.9 per cent).
This will include office assets, comprising 95.8 per cent of the portfolio value, and retail assets comprising the remaining 4.2 per cent.
Units of Keppel Reit closed flat on Oct 7 at $1.03, before the manager called for a trading halt before the market opened on Oct 8. THE BUSINESS TIMES
