Property trust Keppel-KBS US Reit is buying a business campus in the American city of Seattle for US$169.4 million (S$231 million).
It will acquire the Westpark Portfolio from KBS SOR Westpark Portfolio, the real estate investment trust's manager said yesterday.
The campus of 21 freehold buildings will be Keppel-KBS US Reit's third asset in the Seattle area following its acquisition of the Plaza Buildings and the Bellevue Technology Centre.
They are all in a zone known as the Seattle-Tacoma-Bellevue Metropolitan Statistical Area.
The trust manager added that the new Seattle properties are expected to increase Keppel-KBS US Reit's aggregate valuation by 20.8 per cent to US$985.5 million and lift its net lettable area by 24.2 per cent to more than 4 million sq ft.
Mr David Snyder, the manager's chief executive, said: "The acquisition of the Westpark Portfolio will strengthen Keppel-KBS US Reit's foothold in the high-growth Seattle (area).
"This will allow the Reit to capitalise on strong leasing demand from the technology and professional services sectors in a supply-constrained market, with limited sites available for competitive new development.
"At the same time, Seattle, being one of the strongest office markets in the United States, will allow the Reit to benefit from steady rent growth of approximately 4 per cent by 2020."
Mr Synder noted that the deal is expected to be yield accretive and is in line with the firm's strategy to "acquire distinctive assets in first-choice sub-markets and create long-term value".
The deal will be paid for partly with equity fund raising, debt financing and internal cash resources. Keppel and KBS SOR Properties said they will fully participate in any rights issue or preferential offering undertaken to finance the deal.
That statement of support came as the Reit manager sought to address reports that KBS could be listing a Reit in Singapore. It also noted that there are two distinct teams operating within KBS.
The manager added that KBS is considering reorganising the teams that run the various Reits.
Nonetheless, even if the reorganisation occurs, it is expected that there will be no change to the board of directors or senior management of the manager. "While the manager is not in a position to confirm the accuracy of the articles, the procedures to deal with potential conflicts of interests will continue to apply in relation to any such proposed listing," the Reit manager said.
The acquisition is subject to the approval of unit holders at an extraordinary general meeting to be convened.