Keppel Land : to divest one-third interest in Marina Bay Financial Centre Tower 3

Bayfront Development Pte Ltd, a wholly-owned subsidiary of Keppel Land Limited (Keppel Land), has today entered into a conditional share purchase agreement with RBC Investor Services Trust Singapore Limited as trustee of Keppel REIT, for the sale of its one-third shareholding interest in Marina Bay Financial Centre Tower 3 ("MBFC Tower 3") to Keppel REIT.

The agreed value for the property is at S$1,248 million or S$2,790 psf inclusive of a five-year rental support of up to an aggregate amount of S$49.2 million. The agreed value is in line with an independent valuation by Colliers International Consultancy & Valuation (Singapore) Pte Ltd of S$1,245 million as at 28 August 2014.

The purchase consideration, which was negotiated on a willing-buyer and willing-seller basis, has been reached at S$710.1 million (subject to completion and post-completion adjustments).

Keppel Land will receive part payment of the purchase consideration by way of Keppel REIT Units issued. The Units issued to Keppel Land, amounting to $185.0 million, shall be issued on date of legal completion and priced based on the 10-day volume weighted average price of Keppel REIT Units from the first day of ex-dividend trading.

MBFC Tower 3, jointly owned by Keppel Land, DBS Group and Hongkong Land, is a 46-storey Grade A office tower with ancillary retail space. The office tower is part of Marina Bay Financial Centre, a landmark integrated development with a prime waterfront address at Singapore's new financial district, and comprises three premium Grade A office buildings, luxurious apartments and a subterranean retail mall.

Comprising over 1.34 million square feet of net lettable area, MBFC Tower 3 is about 94% occupied by diversified international tenants, including anchor tenant DBS Bank, as well as WongPartnership, RioTinto, McGraw-Hill, Booking.com, Mead Johnson and Lego.

The transaction will yield for Keppel Land a net divestment gain of about S$95.5 million upon completion, derived after deducting the book value of the investment and excluding gain arising from Keppel Land's 44.93% effective interest in Keppel REIT. On a pro forma basis, had the divestment been effected on 31 December 2013, the Group's net tangible assets per share would have increased from $4.52 to $4.58. The Group's gearing ratio would improve from 38.3% as at 31 December 2013 to about 29.1% post divestment.

Mr Ang Wee Gee, CEO of Keppel Land, said, "Over the course of the year, we have seized opportunities to unlock value in our portfolio and redeploy our capital to deepen presence in our core markets and opportunistically enter into new ones. This timely divestment will further strengthen Keppel Land's financial position and also enable us to pursue opportunities in new commercial developments.

"We are also on track to grow our fund management business. The addition of MBFC Tower 3 will increase Keppel REIT's assets under management to over S$8.1 billion, entrenching its position as the leading landlord of premium Grade A buildings in the Raffles Place and Marina Bay precincts."

Under SGX's Listing Manual, the Transaction is not subject to the approval of Keppel Land's shareholders under Chapter 10 of the Listing Manual as the net asset value of Keppel Land's stake in MBFC Tower 3, the net profit from its stake and the consideration for its stake do not exceed 20% of the total net asset value, net profit of Keppel Land and the market capitalisation of Keppel Land respectively. The Transaction does not constitute an "interested person transaction" under Chapter 9 of the Listing Manual from Keppel Land's perspective. As at the date of the S&P Agreement, the interest of Keppel Corporation and Temasek in Keppel REIT, other than held through Keppel Land, is below 5%.

For Keppel REIT, the Transaction is subject to and conditional upon among others, the approval of its minority Unitholders at its extraordinary general meeting.

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About Keppel Land Limited

One of Asia's premier property companies, Keppel Land is recognised for its sterling portfolio of award-winning residential developments and investment-grade commercial properties as well as high standards of corporate governance and transparency.

The Company is geographically diversified in Asia, with Singapore and China as its core markets, and Vietnam and Indonesia as its growth markets. It focuses on a two-pronged strategy of property development for sale and property fund management.

A leading prime office developer in Singapore, Keppel Land contributes to enhancing the city's skyline with landmark developments such as Marina Bay Financial Centre, Ocean Financial Centre and One Raffles Quay.

The Company is committed to grow its commercial portfolio in key Asian cities. Its portfolio of overseas commercial properties includes Seasons City in the Sino-Singapore Tianjin Eco-City, a Grade A office development in Beijing, and a retail mall Life Hub @ Jinqiao in Shanghai, China, Saigon Centre in Ho Chi Minh City, Vietnam as well as International Financial Centre Jakarta in Indonesia. The Company also plans to develop Park Avenue Central in Shanghai into a retail-cum-office complex.

Keppel Land is also Asia's premier home developer with world-class iconic waterfront residences at Keppel Bay and Marina Bay in Singapore.

With a pipeline of over 66,000 homes across Asia, Keppel Land is well-positioned to meet the demand for quality housing driven by homeownership aspirations.

An established property fund manager, Keppel Land has two property fund management vehicles, Keppel REIT, a pan-Asian commercial real estate investment trust, and Alpha Investment Partners.

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