Keppel REIT to divest stake in Brisbane property for A$275M

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Keppel REIT will divest its 50 percent stake in the 275 George Street property in Brisbane, Australia, to Charter Hall Prime Office Fund, the holder of the remainder of the property, for A$275 million, the REIT’s manager said in a filing to SGX Thursday.

The 31-storey office property, acquired by Keppel REIT in 2010, was sold above its valuation price of A$245 million from CBRE Valuations at end-2020, the filing said. The REIT added it expected to post an accounting gain of around A$9.8 million.

“The divestment of 275 George Street is part of our continuing portfolio optimisation strategy, and will provide us with greater financial flexibility as we seek strategic and higher yielding acquisitions to enhance the REIT’s income resilience and deliver sustainable total return to unitholders,” Paul Tham, CEO of the REIT’s manager, said in the statement.

The divestments will initially be used to repay debt and transaction costs before being used for other growth opportunities, the REIT said.

After the expected transaction completion in the third quarter of this year, Keppel REIT’s pro forma S$8.7 billion portfolio will hold 10 commercial properties across Singapore, Australia and South Korea.