Keppel Chairman Teoh: May consider Prime US REIT and Keppel Pacific Oak US REIT combination

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

Correction: An earlier version of this article misstated the name of Keppel Pacific Oak US REIT. It has been corrected.

Keppel Corp. could consider supporting a combination between Keppel Pacific Oak US REIT and Prime US REIT, the company’s Chairman Danny Teoh said in response to a shareholder question at Keppel’s extraordinary general meeting (EGM) Thursday.

“Chairman said that if there was a good rationale for a synergistic combination between Keppel Oak Pacific US REIT and Prime US REIT and such combination appealed to unitholders, Keppel would support in its capacity as a unitholder,” according to the minutes of the EGM, published to SGX Thursday.

Prime US REIT has a portfolio of 14 U.S. office properties, while Keppel Pacific Oak US REIT holds 15 U.S. office properties.

Keppel Capital is a strategic partner of Prime US REIT.

Prime US REIT is managed by KBS US Prime Property Management, which is jointly owned by KBS Asia Partners, Keppel Capital Two, a wholly-owned subsidiary of Keppel Capital Management, Times Properties, a wholly-owned subsidiary of Singapore Press Holdings, and Experion Holdings, a wholly-owned subsidiary of AT Holdings, according to the REIT’s 2020 annual report.

Keppel Capital Investment Holdings owns 5.89 percent of Prime US REIT’s units directly, while Keppel Corp. has a deemed 6.38 percent interest in the REIT, according to the annual report.

In addition, Keppel Capital Investment Holdings owns 6.79 percent of Keppel Pacific Oak US REIT, or KORE, according to the REIT’s 2020 Annual Report. Keppel Corp. has a deemed interest of 7.95 percent in KORE, the annual report said.

In addition, the REIT’s manager, Keppel Pacific Oak US REIT Management, is a 50:50 joint venture of Keppel Capital Holdings and KORE Pacific Advisors, the annual report said.

Responses to the questions at the EGM, held Thursday, were published to SGX Thursday.

The EGM was held for Keppel’s shareholders to vote on whether to approve Keppel’s bid to acquire SPH; the resolution was approved overwhelmingly, but SPH’s shareholders may be less keen as a higher bid is on the table from rival bidder Cuscaden Peak.

Singapore state-owned investment company Temasek Holdings has a deemed interest of 11.71 percent in KORE and a 9.03 percent deemed interest in Prime US REIT, according to the REITs’ annual reports. Temasek also has an around 20.99 percent deemed interest in Keppel Corp., as of 9 July, according to SGX data.