K-REIT – BT

K-Reit ups Prudential Tower stake

It buys four office floors comprising 48,158 sq ft for a total of $125.1m

OFFICE landlord K-Reit Asia will buy four strata office floors in Prudential Tower for $125.1 million, boosting its stake in the building to 92.8 per cent, it said yesterday.

The four floors total 48,158 sq ft and represent 19.4 per cent of the strata value of the building. K-Reit Asia, a unit of Keppel Land, currently owns 73.4 per cent of the strata value of the building.

The trust will buy level 26 from Innisvale Investments; level 27 from Maraha; level 28 from Lima Bintang Holdings; and level 29 from Mirabeau Gardens.

Post-acquisition, it will own a total of 223,830 sq ft of Grade A net lettable area office space at Prudential Tower, which is located at the junction of Church Street and Cecil Street. The committed leases in the property have a weighted average lease expiry of 3.6 years, the trust said.

Under the sale and purchase agreement, the vendors have agreed to provide rental support, subject to a maximum sum of $8.09 million for the period commencing from the date of completion of the acquisition until March 31, 2015.

The acquisition is expected to be immediately accretive to K-Reit Asia’s distribution per unit. Post-acquisition, more than 90 per cent of the trust’s Singapore portfolio will be located in the prime areas of Raffles Place and Marina Bay, said Ng Hsueh Ling, chief executive of the trust’s manager.

‘It (the acquisition) reinforces K-Reit Asia’s strategy to be a leading landlord in Singapore’s key business and financial districts,’ Ms Ng said.

The acquisition will be funded entirely by debt and when completed, will increase K-Reit’s aggregate leverage ratio marginally from 37 per cent to about 39 per cent.

K-Reit Asia units gained 4 cents or 3.2 per cent to close at $1.29 yesterday.