Keppel REIT divests Bugis Junction Towers for $547.5m

This is $388m higher than its purchase price.

Keppel REIT is selling the Bugis Junction Towers for $547.5m, 6.3% or $32.5m higher than the property’s $515m valuation, according to an SGX filing.

The price comes at $2,200 per square foot (psf) and is 243.2% or $388m higher above the purchase price of $159.5m.

Completed in 1994, the 15-storey development is part of the Bugis Junction integrated mixed-use development. It has approximately 70-year leasehold land tenure remaining and offers close to 250,000 sf of net lettable area (NLA). As at 30 June, committed occupancy was 100% and the weighted average lease expiry (WALE) was at 6.2 years.

The divestment is reportedly part of the REIT’s portfolio optimisation. The REIT expects an estimated accounting gain of approximately $18.3m from the divestment.

Also read: Keppel REIT NPI dropped 28.1% to $31.06m in Q2

Keppel REIT Management also plans to direct the proceeds to its DPU-accretive unit buy-back programme, as well as fund reinvestments, distribute capital gains, and pare down debt.

Furthermore, part of the proceeds will be used to pay the $2.7m divesment fee to Keppel REIT Management, the manager of Keppel REIT.