Keppel secures $786 million for infrastructure fund at its first close

SINGAPORE – Keppel Corporation’s flagship open-ended infrastructure fund, Keppel Core Infrastructure Fund (KCIF), achieved its first close with initial capital and co-investment commitments of US$575 million (S$786.4 million).

Keppel on Friday said this is not expected to have a material impact on its earnings per share or net tangible assets per share for the current financial year.

Commenting on “a strong first closing” of the fund in Keppel’s flagship KCIF series, Keppel’s chief executive of fund management and chief investment officer Christina Tan said: “The robust demand reflects the appeal of critical infrastructure assets with inflation-protected cash flows, and importantly for fund products offered and managed by a trusted general partner such as Keppel.”

KCIF has an initial target size of US$2.5 billion.

The fund focuses on defensive and essential infrastructure assets across Asia-Pacific’s developed markets, including assets with proven operating track records, long concessions with strong counterparties and those that are regulated.

Keppel said this would in turn provide stable, long-term and predictable cash flows.

“KCIF is primed to benefit from the strong urbanisation trends in Asia-Pacific, which accelerate demand for essential infrastructure in the economic and social, energy transition and digital infrastructure sectors,” said Ms Tan.

“KCIF will also draw on Keppel’s development capabilities and strong operational track record to undertake appropriate value-add initiatives, which will enable the fund to deliver sustainable and predictable returns to investors over the long term.”

In earlier news on Thursday, Keppel said its private fund, Keppel Education Asset Fund, is acquiring two properties in Australia that it intends to lease out to educational institutions.

The properties were acquired for A$198 million (S$171 million) and are expected to bring Keppel’s portfolio of assets in Australia to A$4.8 billion upon completion.

Ms Tan said: “The education market is a resilient one, with education assets offering stable returns and inflation-adjusted rentals.”

She also noted that the two Australian assets come with long leases and established tenants, and offer investors attractive, risk-adjusted returns and yield-steady cash flows.

One of the Australian assets is a purpose-built campus that is a 15-minute drive from the Sydney Central Business District.

The property has a net lettable area of approximately 10,700 sq m, and is currently fully leased to the University of New South Wales on a long-term basis. The acquisition of the asset was completed in August.

The other Australian acquisition is a seven-storey commercial building in North Sydney, to be acquired under a forward-purchase agreement.

Extensive works will be carried out on the property to upgrade and convert it to an independent school campus, which will yield a net lettable area of approximately 9,150 sq m.

Keppel Corp said: “The property comes with pre-commitment from a leading global operator of premium schools for a long-term lease.”

The acquisition is expected to be completed, subject to the fulfilment of certain conditions, by the first quarter of 2025.

Keppel shares closed 1.5 per cent lower at $6.66 on Friday, after the announcements. THE BUSINESS TIMES