Keppel Reit to divest freehold Grade A office building in Seoul for US$255.8 million

[SINGAPORE] Keppel Real Estate Investment Trust (Reit) on Wednesday (Sep 23) said that it has entered an agreement to sell T Tower – a freehold Grade A office building in Seoul – to a real estate fund based in South Korea, valued at 348.8 billion won (US$255.8 million).

This price represents a 37.2 per cent premium to the property’s purchase price upon acquisition in April 2019, and a 7.4 per cent premium to its valuation as at Aug 31 in local currency terms.

Located in Seoul’s central business district, the 28-storey building has a gross floor area of 41,598 square metres, and was 92.1 per cent occupied as at Jun 30.

A bourse filing on Wednesday said that the Reit is set to divest its 99.38 per cent interest in the tower. The other 0.62 per cent in the building is held by Keppel Capital Investment Holdings, which will also sell its stake.

The manager of Keppel Reit intends to use up to S$25 million of net sale proceeds to undertake unit buybacks on the open market following its third-quarter business update, subject to prevailing market conditions and applicable laws and regulations.

The divestment is expected to be completed by the fourth quarter this year.

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Chua Hsien Yang, CEO of the manager, said: “Together with the recent divestment of KR Ginza II in Tokyo, the transaction underscores our strategic capital recycling capability, strengthens Keppel Reit’s balance sheet and enhances the Reit’s financial flexibility.”

He added that post-sale, Singapore will account for 81.1 per cent of the trust’s portfolio value.

Units of Keppel Reit ended 1.2 per cent or S$0.01 higher at S$0.86, prior to the news.