KEPPEL Reit is selling its stake in Prudential Tower for $512 million, said the firm on Thursday.
The manager for the real estate investment trust (reit) announced that its trustee has entered into agreements with four companies for the sale of its 92.8 per cent stake, and has received an initial deposit of $25.6 million.
They are KOP, Lian Beng Group, KSH Holdings and Centurion Global.
The sale price is 4.5 per cent above the latest valuation of the tower of $490 million, which also represents a 46.7 per cent premium over the original purchase price at $349.1 million.
Prudential Tower is about 16 years old and fully occupied.
The reit manager said in a statement that "a substantial amount of the sale proceeds will be used to repay existing debt", giving the reit greater financial flexibility.
The remainder will be for general corporate and working capital use or acquisition opportunities.
After the sale, the reit's aggregate leverage will decline from 42.1 per cent to 38.8 per cent.