Keppel REIT (K71U) Investor presentation summary

Transaction overview

• Proposed acquisition of a 51.0% interest in Keppel South Central for an agreed property value of S$626.2 million, equivalent to S$2,350 psf; value is 3%–4% below independent valuations.

• Purchase consideration is S$610.9 million; estimated total acquisition cost is S$627.1 million, including ~S$3.1 million acquisition fee and ~S$13.1 million other transaction costs.

• Funding may comprise bank loans, perpetual securities, cash and/or equity; 50% of the acquisition fee was waived, reducing it to 0.5% of agreed property value.

Asset and market position

• Newly completed, 33-storey Grade A commercial building in Tanjong Pagar, with ~522,500 sq ft NLA and office, retail, event and flexible-workspace offerings.

• The property received TOP on 17 January 2025; it has a freehold title, with a 70-year leasehold interest for sale to the REIT trustee.

• Singapore CBD office vacancy is forecast at 3.8% by 2030; constrained supply, tenant demand and Tanjong Pagar precinct renewal support the market outlook.

• Portfolio value is shown increasing from S$11.5 billion to S$12.1 billion after the acquisition and assumed divestments of T Tower and KR Ginza II.

Income and investment merits

• Initial net property yield is 4.3%; pro forma DPU accretion is 2.01%, based on adjusted FY2025 DPU plus assumed divestments.

• Guaranteed monthly amount is ~S$2.23 million for the 51.0% interest; vendor support covers any shortfall against the guaranteed amount, subject to the arrangement terms.

• Committed leases and leases in documentation represented 52.7% occupancy as at 30 September 2026; committed leases alone represented 48.8%. Their average rent was ~S$11.30 psf per month.

• Potential income upside comes from higher rents on mid-to-high floors and occupancy above 95%; certifications include BCA Green Mark Platinum, WiredScore Platinum and SmartScore Platinum.