Keppel REIT has entered a deal to acquire an around 99.38 percent stake in an office building in Seoul’s central business district for 252.6 million South Korean won, or around S$301.4 million, from a fund managed by PGIM Real Estate, the REIT said Tuesday.
A wholly owned subsidiary of Keppel Capital will acquire the remaining 0.62 percent stake in the building, called T Tower, the REIT said in a filing to SGX.
The acquisition will be accretive to the distribution per unit and will have an initial net property income yield of around 4.7 percent, the REIT said.
The deal will be funded with debt, including the proceeds of a 1.90 percent convertible bond announced earlier this month, the REIT said.
“The acquisition of T Tower in Seoul is in line with Keppel REIT’s long-term strategic growth plan,” Paul Tham, CEO of Keppel REIT’s manager, Keppel REIT Management, said in the statement.
“While Keppel REIT’s portfolio will remain anchored by our prime CBD assets in Singapore, we believe that owning assets across Singapore, Australia and South Korea will enhance our geographical and income diversification, as well as provide greater stability and further opportunities for growth in the long term,” Tham added.
T Tower is a 28-storey office building, located near the Seoul Station railway stop, the filing said, adding it was 100 percent leased to established national and international tenants.
Keppel Investment Management, Keppel Capital’s asset management arm in South Korea, will be appointed the local asset manager for the property, the filing said.
The acquisition is expected to be completed in the second quarter of this year, it said.
PGIM Real Estate is the real estate investment business of PGIM, which is the global investment management business of U.S.-based Prudential Financial.