Keppel REIT said on 20 October 2026 that it would acquire a 51% interest in Keppel South Central, a 33-storey office tower in Singapore's Tanjong Pagar district, from its sponsor Keppel for S$610.9m.
Why Keppel REIT is buying Keppel South Central (51% interest)
The manager said the deal strengthens the trust's Singapore office portfolio with a modern Grade A building of about 522,500 sq ft of office, retail, event and flexible workspace, completed in January 2025. It projects an initial property yield of 4.3% and pro forma distribution per unit accretion of 2.01%.
Deal terms and financing
The agreed property value for the 51% interest is S$626.2m, or about S$2,350 psf on a 70-year leasehold basis, against independent valuations of S$646.7m (Colliers) and S$652.0m (CBRE). The vendor, K-Commercial Investment, will provide guaranteed monthly income of S$2.23m for up to five years. Funding will come from bank loans, perpetual securities, internal cash and/or equity, taking pro forma aggregate leverage to 39.2%.
Regulatory approvals and timing
Because the vendor is the sponsor, the acquisition is an interested person transaction requiring Keppel REIT unitholder approval at an EGM expected in the fourth quarter of 2026. Completion is expected in the second quarter of 2027.
Market context
Committed and in-documentation leases covered 52.7% of net lettable area at 30 September 2026 and about 60% by 15 October. Some commentators have argued the income support masks the building's partial occupancy and that the terms favour the sponsor.
