Keppel REIT Launches S$113 Million Private Placement to Fund Sydney Retail Acquisition and Expand Unitholder Base 134

Keppel REIT Launches S\$113 Million Private Placement to Fund Strategic Sydney Retail Acquisition

Key Points from the Announcement

Keppel REIT is launching a fully underwritten private placement to raise a minimum of approximately S\$113 million in gross proceeds.
The proceeds will primarily fund the acquisition of a 75% stake in Top Ryde City Shopping Centre in Sydney, Australia.
New units will be issued at a price between S\$0.983 and S\$1.004 per unit, representing a discount of 2.56% to 4.60% to the last traded VWAP.
The new units will increase the total units in issue by approximately 112.5 million (about 2.89% of existing units).
The placement is restricted to institutional, accredited, and other eligible investors, including qualified institutional buyers in the U.S.
Existing unitholders will receive an advanced distribution, but new units will not be entitled to this payout.
The placement is fully underwritten by DBS, OCBC, and UOB.

Comprehensive Details for Investors

Keppel REIT Management Limited has announced a major capital raising exercise via a private placement, targeting gross proceeds of no less than S\$113 million. This move is closely tied to Keppel REIT’s latest strategic expansion into the Australian retail property sector through the acquisition of a 75% interest in Top Ryde City Shopping Centre, Sydney.

Pricing and Structure

The issue price for new units will be in the range of S\$0.983 to S\$1.004 per unit. This represents a 2.56% to 4.60% discount to the previous day’s VWAP (S\$1.0304 per unit) and a 1.01% to 3.08% discount to the adjusted VWAP (S\$1.0143 per unit).
The final price will be determined after a book-building process by the manager and joint underwriters.
The placement is fully underwritten by DBS Bank, OCBC, and United Overseas Bank, providing assurance of successful fundraising.

Use of Proceeds

Approximately S\$109.6 million (97% of gross proceeds) will be used to partially finance the Sydney shopping centre acquisition.
About S\$3.4 million (3%) will cover placement fees and related professional expenses.
Any remaining funds will be used for general corporate or working capital purposes.
If the acquisition does not proceed, proceeds may be used at the manager’s discretion, including future acquisitions or debt repayment.

Strategic Rationale and Impact

This acquisition marks Keppel REIT’s expansion into the defensive retail sector, targeting assets focused on convenience and non-discretionary spending.
Australia’s resilient economy and robust consumer demand are cited as key factors behind the move.
The asset is expected to deliver strong performance and be accretive to the distribution per unit for unitholders.

Trading Liquidity and Unitholder Base

The issuance of approximately 112.5 million new units will expand Keppel REIT’s total units by 2.89%, potentially increasing free float and trading liquidity, and raising the REIT’s profile among institutional investors.
The new units will rank pari passu with existing units for future distributions, except they will not participate in the advanced distribution for the period up to their issuance.

Advanced Distribution and Entitlement

An advanced distribution for the period from 1 July 2025 to just before the new units are issued (expected 17 October 2025) will be paid only to existing unitholders as at 5:00pm on 16 October 2025. The payout is estimated to be between 1.60 and 1.63 Singapore cents per unit.
New units will not be entitled to this advanced distribution but will participate in subsequent distributions.

Eligibility and Regulatory Approvals

The placement is open only to eligible institutional, accredited, and selected investors, with strict regulatory restrictions, especially for U.S. persons.
Keppel REIT will apply for listing approval for the new units on the SGX-ST Main Board.
The placement and issuance are made under a standing general mandate, with no need for further unitholder approval, as the issuance is within prescribed limits.

Key Considerations for Shareholders

The private placement and acquisition represent a significant event for Keppel REIT, likely to affect both share price and future distributions.
The discount to market price may lead to short-term price pressure, but the strategic acquisition is positioned to deliver long-term accretive returns and diversification.
Increased liquidity and institutional ownership could enhance the REIT’s profile and valuation multiples over time.
If the acquisition does not complete, the use of proceeds may shift to other purposes, which could impact investor expectations and share price performance.
Existing unitholders will benefit from the advanced distribution, while new investors will only participate in future distributions.

Important Notices

This announcement is not an offer or solicitation for the sale or purchase of securities in Keppel REIT.
The new units have not been registered under U.S. securities law and cannot be offered or sold in the U.S. except under specific exemptions.
Investment in Keppel REIT units is subject to risk, with unit values and income potentially fluctuating.

Disclaimer: This article is for informational purposes only, based on the official announcement by Keppel REIT Management Limited. It does not constitute investment advice or an offer to buy/sell securities. Investors should consult their own advisors and review all public disclosures before making investment decisions. Past performance does not guarantee future results. This publication has not been reviewed by the Monetary Authority of Singapore.