Lendlease Reit to sell office component of Jem to Keppel for $462 million
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Jem's 12-level office space is leased to the Ministry of National Development for 30 years from December 2014.
PHOTO: LENDLEASE REIT
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SINGAPORE – Lendlease Global Commercial Reit will divest the office component of its Jurong commercial-retail development Jem to Keppel for $462 million, with proceeds to be used to pay down debts and potentially for distribution to unit holders.
In an exchange filing on Aug 4, the manager of the real estate investment trust (Reit) announced that the trustee entered into a put and call option agreement with the purchaser on Aug 4.
The 12-level office space, acquired in 2022, is leased to the Ministry of National Development for 30 years from December 2014.
Net proceeds from the divestment will be used to predominantly repay certain loans, and is expected to reduce the Reit’s aggregate leverage ratio to approximately 35 per cent on a pro forma basis, from 42.6 per cent as at June.
The divestment could result in a net cash gain of approximately $8.9 million, which will be available for distribution to unit holders.
The manager said key benefits of the divestment include improving the Reit’s financial position, unlocking value of the office component and increasing the Reit’s focus on retail to more than 85 per cent of its portfolio by valuation
Had the divestment been completed on July 1, 2024, the pro forma distribution per unit would have been 3.52 cents, 2.2 per cent lower than 3.6 cents before the sale. Had the divestment been completed in end-June 2025, the net asset value per unit would have been 74 cents, marginally lower than 75 cents before the sale.
Keppel said in a statement that private funds under its sustainable urban renewal strategy are acquiring the office component of Jem, and the asset manager and operator will explore upgrading works to reduce the energy-use intensity.
Keppel’s earnings per share and net tangible assets per share for the current year are not expected to be materially impacted by the acquisition, it said.
On Aug 5, Lendlease Global Commercial Reit units closed up 1.8 per cent at 57.5 cents, while Keppel shares ended 0.8 per cent higher at $8.42. THE BUSINESS TIMES
