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Keppel Reit to buy 50% stake in office tower to be built in Melbourne for A$348m

KEPPEL Reit on Thursday signed an implementation deed with Australia Postal Corporation to buy a 50-per-cent interest in a premium office tower to be developed at 311 Spencer Street, Melbourne, Australia.

The consideration is A$347.8 million (S$362.4 million) for the 50-per-cent stake.

The remaining 50-per-cent stake will be held by Cbus Property, an Australian property developer, which is also the developer for this development.

It will be developing the property into a 42-storey Grade A office tower with an estimated total net lettable area of 717,000 square feet and 600 car park lots.

The office tower is located between Melbourne's central business district and the new Docklands precinct, which is an extension of the CBD.

Sited on freehold land, it is within walking distance to the Southern Cross Station, the city's major railway and transportation hub.

The construction of the office tower will start in the third quarter this year, and the practical completion can be expected in the fourth quarter of 2019.

The transaction will be funded through a combination of a part of the proceeds from the divestment of 77 King Street in Sydney in January 2016 and through debt.

Units of Keppel Reit closed half a cent lower at S$1.145 on Thursday.