Seeing positives for Singapore Reits from investors’ support of Keppel Reit’s DPU-dilutive MBFC Tower 3 acquisition

[SINGAPORE] Investors buy real estate investment trusts (Reits) to earn recurrent income from periodic distributions. Managers therefore strive to grow a trust’s distribution per unit (DPU).

One strategy is to buy properties that raise DPU. However, Keppel Reit recently did a mega deal where the immediate impact was to lower DPU.

The trust acquired an additional one-third stake in Marina Bay Financial Centre (MBFC) Tower 3 at an agreed property value, based on one-third interest, of S$1.453 billion or S$3,268 per square foot. The acquisition cost totalled S$937.5 million.