Keppel to acquire stakes in Prime US REIT and its manager

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

Keppel Corp. will acquire a 30 percent interest in KBS US Prime Property Management from KBS Asia Partner for US$21.6 million, the Singapore-listed conglomerate said in a filing to SGX Friday.

KBS US Prime Property Management, the proposed manager of Prime US REIT, is a U.S. commercial REIT expected to be listed on the Singapore Exchange, the filing said. The REIT will invest mainly in stabilized income-producing office assets and real estate-related assets in the U.S.

Keppel also entered an agreement with KBS US Prime Property Management to buy a 6.765 percent stake of Prime US REIT immediately after the IPO, the filing said.

Prime US REIT lodged a preliminary prospectus with the Monetary Authority of Singapore on Friday, the filing said.

The deal is via Keppel Capital Two, a wholly owned subsidiary of Keppel Corp., which is held through Keppel Capital Holdings, the filing said.

“The acquisition allows Keppel Capital to deepen its participation in the U.S. commercial sector which is the largest market globally and continues to expand the contribution of recurring asset management profits for Keppel Group,” Keppel said in the filing.

“The joint venture also strengthens the profile of Keppel Capital as a global asset manager and expands its geographic footprint in the U.S. market with a portfolio of 11 quality, stabilised assets strategically located in nine key primary office markets across the U.S.,” Keppel added.

The shareholders of KBS US Prime Property Management are KBS Asia Partners, Keppel Capital Two and Experion Holdings, with 60 percent, 30 percent and 10 percent, respectively, the filing said.

KBS Asia Partners also agreed to grant Times Properties, a wholly owned subsidiary of Singapore Press Holdings, a call option for a 20 percent stake in the REIT manager, Keppel said.

The option gives Times the right to require KBS Asia Partners to sell it the stake after the MAS approves Times’ application to be a substantial shareholder of the REIT manager, the filing said.

In a separate filing, SPH said the 20 percent stake was priced at US$14.6 million.

SPH added that Times Properties would subscribe for a 6.765 percent stake in Prime US REIT immediately after the the IPO is completed for a consideration of US$55 million in cash.

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