Keppel REIT sells 50% stake in first Australian property for A$275m

The firm said this is part of its portfolio optimisation strategy.

Keppel REIT has sold its 50% interest in the 275 George Street property in Brisbane, Australia to Charter Hall Prime Office Fund (CPOF) for A$275 million ($277.04 million).

275 George Street was acquired by Keppel REIT in 2010 as its first Australian asset. The adjusted consideration of A$264 million is 7.8% above the last valuation of A$245 million and 59% above the original purchase price of A$166 million in 2010. Keppel REIT is expected to recognise an estimated accounting gain of A$9.8 million ($10 million) from the divestment. 

According to Paul Tham, chief executive officer of the manager of Keppel REIT, the divestment of the Australian property is part of the company’s continuing portfolio optimisation strategy, and will provide Keppel REIT greater financial flexibility as it seeks strategic and higher-yielding acquisitions to enhance the REIT’s income resilience and deliver a sustainable total return to its unitholders.

Completed in 2009, 275 George Street is a 31-storey freehold office building located in Brisbane’s central business district with 41,720 square metres of net lettable area. The development has a committed occupancy of 90.6% as of 31 March. Its principal tenants include Telstra Corporation and the Shell-operated Queensland Gas Company.

The sale is expected to be completed in the third quarter of 2021. Keppel REIT will have an expected portfolio of 10 premium commercial properties with the bulk of them located in Singapore.