K-Reit's proposed acquisition of a one-third stake in MBFC phase 1 and proposed divestment of KTGE - 11 OCT 2010

Proposed acquisition of a one-third stake in MBFC phase 1 and proposed divestment of KTGE. See:

• Press release and Presentation Slides
• Report

Key Points

•  
• K-REIT Asia has entered into a conditional share purchase agreement with Bayfront Development Pte. Ltd., a wholly-owned subsidiary of Keppel Land Limited (Keppel Land), for the acquisition of a one-third interest in Phase One of Marina Bay Financial Centre (MBFC Phase One) at an agreed value of approximately S$1,426.8 million (inclusive of rental support).
• At the same time, as part of the asset swap, K-REIT Asia has signed a conditional sale and purchase agreement with Mansfield Developments Pte Ltd, a wholly-owned subsidiary of Keppel Land, for the divestment of Keppel Towers and GE Tower (KTGE) at an agreed value of S$573.0 million, which is above the valuation of S$540.7 million as at 31 December 2009, according to a Keppel Land report.
• MBFC Phase One comprises two office towers, Marina Bay Financial Centre Towers 1 & 2, with a total net lettable area (NLA) of about 1.65 million sf, Marina Bay Link Mall with a retail NLA of about 94,500 sf and 684 carpark spaces. Fully committed, major tenants at MBFC Towers 1 & 2 include Standard Chartered Bank, Barclays Capital, BHP Billiton, Nomura, Macquarie, American Express and Prudential.
• After the asset swap, K-REIT Asia's portfolio asset size will increase from S$2.5 billion to approximately S$3.4 billion. The asset swap is expected to be completed no later than 31 December 2010.
• The acquisition of the one-third interest in MBFC Phase One will be funded by a combination of the sale proceeds from the divestment of KTGE, new borrowings and part of the proceeds from K-REIT Asia's November 2009 rights issue.