Keppel REIT buys Hongkong Land’s one-third stake in MBFC Tower 3 for $937.5 million
Hongkong Land’s divestiture of its claim arrives on the heels of its transaction of MCL Land, the group’s Singapore and Malaysia property arm. In September, Hongkong Land released the sale of MCL Land to Malaysia’s Sunway Group for $739 million, with the agreement finished last month.
MBFC Tower 3 is a 46-storey Level An office complex with a final lettable location of concerning 1.3 million sq ft. The 99-year leasehold building has a committed tenancy of about 99.5% as at Sept 30 and a weighted average lease expiration of 3.5 years. DBS is the support lessee.
The investment cost is based upon a concurred estate market value of $4.359 billion for MBFC Tower 3, or $1.453 billion for a one-third interest. This stands for a discount rate of around 1% to its private valuation of $1.467 billion. The acknowledged real estate worth converts to $3,268 psf.
“The exercise of our pre-emptive right to obtain the small one-third share of MBFC Tower 3 offers an unusual chance to raise our interest in a renowned asset in the prime Marina Bay location, with opportunity for future rental benefit and capital appraisal over the long-term,” claims Chua Hsien Yang, Chief Executive Officer of the Keppel REIT’s supervisor.
The investment factor to consider, changed for liabilities held by MBFC Tower 3’s holding business, totals up to $908.1 million. The complete purchase price of $937.5 million is comprehensive of a purchase fee of $14.5 million owed to the supervisor, in addition to deal costs and costs of around $14.9 million. The procurement is projected to be finished on Dec 31.
The REIT has already released an underwritten non-renounceable preferred package to elevate gross earnings of roughly $886.3 million to partly pay for the purchase. Unitholders that are authorized to take part will certainly be provided 23 brand-new units for each 100 existing units at an issue cost of $0.96 per new system.
In a Dec 11 statement, the REIT’s supervisor specifies it obtained pre-emptive deal notices from Sageland Private Limited and Freyland Pte Ltd, the two branch of Hongkong Land International Holdings, on Nov 21 connecting to the sales of a one-third risk in MBFC Tower 3, a one-sixth risk in MBFC Tower 1 and 2, and a one-sixth risk in One Raffles Quay.
The executive explains it has actually approved the deal for the risk in MBFC Tower 3, by which Keppel REIT presently possesses a one-third involvement. Post-completion, the REIT will certainly hold a two-thirds interest in the tower. DBS Team Holdings maintains the standing 3rd.
Keppel REIT is acquiring an extra one-third involvement in Marina Bay Financial Centre (MBFC) Tower 3 from Hongkong Land at a complete procurement rate of $937.5 million.
