Keppel REIT to Acquire Additional One-Third Interest in Marina Bay Financial Centre Tower 3

Overview of the Transaction

Keppel REIT has announced the acquisition of an additional one-third interest in Marina Bay Financial Centre (MBFC) Tower 3, a premium Grade A office tower in Singapore’s Central Business District (CBD). This deal will increase Keppel REIT’s total interest in MBFC Tower 3 from one-third to two-thirds, strengthening its foothold in the heart of Singapore’s financial district.

Key Transaction Details

• Agreed Property Value (for one-third interest): S\$1,453.0 million (S\$3,268 per sq ft)
• Total Acquisition Cost: S\$937.5 million
• Discount to Independent Valuation: Approximately 1.0% below the independent valuation of S\$1,467.3 million by Colliers International (as at 1 December 2025)
• Committed Occupancy: 99.5% (as at 30 September 2025)
• Weighted Average Lease Expiry (WALE): 3.5 years
• Aggregate Net Lettable Area (NLA): 1.3 million sq ft
• Tenure: 99 years from 8 March 2007 (80.2 years remaining)

Key Investment Merits

• Rare Opportunity: This acquisition allows Keppel REIT to deepen its presence in the core CBD, specifically the highly sought-after Marina Bay area. Opportunities to acquire significant stakes in top-tier assets like MBFC Tower 3 are limited.
• Premium Asset with Strong Tenant Base: MBFC Tower 3 boasts a robust tenant profile, with 47.7% of tenants from banking, insurance, and financial services, followed by legal, technology, energy, and other sectors. The building’s occupancy and rental rates further highlight its status as a benchmark property.
• Attractive Valuation: The acquisition price represents a 1% discount to the independent valuation, and MBFC Tower 3’s passing rent is approximately 10% below the Marina Bay average, suggesting potential rental upside.
• Certified Green and Health Standards: MBFC Tower 3 is BCA Green Mark Platinum and WELL Health-Safety certified, aligning with growing ESG investment trends.
• Enhances Market Capitalisation: Post-acquisition, Keppel REIT’s market capitalisation is poised to rise, improving its position on the Straits Times Index (STI) reserve list and increasing visibility among institutional investors.
• Strengthens Singapore Portfolio Exposure: The transaction will lift Keppel REIT’s Singapore portfolio weighting from 75.8% to 79.0% of total assets, reinforcing its commitment to the local market.
• Singapore Office Market Fundamentals: There is no new office supply expected in Marina Bay until at least 2029, and new construction typically requires up to five years. This supply-demand imbalance supports stable rental income and potential capital appreciation.

Method of Financing

The acquisition will be initially funded by an Equity Bridge Loan, which will be fully repaid using proceeds from an underwritten, non-renounceable preferential offering designed to raise approximately S\$886.3 million. The breakdown of the financing is as follows:

• Equity: S\$886.3 million (94.5%)
• Debt: S\$51.2 million (5.5%)

The preferential offering is a significant move, as it demonstrates sponsor commitment and confidence in the acquisition and the long-term prospects of Keppel REIT.

Details of the Preferential Offering

• Issue Size: S\$886.3 million
• Allotment Ratio: 23 new units for every 100 existing units held by entitled unitholders
• Issue Price: S\$0.96 per new unit (a discount of about 6.8% to the volume weighted average price)
• Sponsor Commitment: Sponsor will subscribe for approximately 37.3% of the new units, reflecting a strong vote of confidence in the transaction
• Timeline: The offering opens on 26 December 2025 and closes on 9 January 2026. Listing and trading of the new units is scheduled for 19 January 2026.

Impact on Shareholders and Potential Price Sensitivity

• Dilution and DPU Impact: The preferential offering will result in the issuance of approximately 923.2 million new units. Depending on the scenario (e.g., tax transparency and interest rates), the pro forma distribution per unit (DPU) may see a dilution of between 3.6% and 6.4%, with DPU dropping from 5.60 Singapore cents to between 4.42 and 4.55 Singapore cents.
• Aggregate Leverage: Keppel REIT’s aggregate leverage will decrease slightly from 42.2% to 41.9% post-acquisition and after the offering, improving its balance sheet strength.
• Net Asset Value (NAV): Adjusted NAV per unit will decrease from S\$1.24 to S\$1.18 post-acquisition.
• Enhanced Market Profile: The enlarged market capitalisation post-offering will make Keppel REIT the top name on the STI reserve list, making it next-in-line for potential inclusion in the index—a move that could attract further institutional inflows and boost share price.
• Potential Rental Upside and Capital Appreciation: With passing rent currently below the area’s average and no new office supply expected in the near future, there is significant potential for both rental growth and capital appreciation.
• Strategic Positioning: The deal cements Keppel REIT’s status as a leading owner of prime CBD assets, positioning it well to benefit from future urban transformation and development in the Marina Bay and Marina South precincts.

Important Dates for Investors

• Last cum Preferential Offering date: 18 December 2025
• Ex-Preferential Offering date: 19 December 2025
• Record Date: 22 December 2025
• Opening of Preferential Offering: 26 December 2025
• Closing of Preferential Offering: 9 January 2026
• Listing and Trading of New Units: 19 January 2026

Conclusion

The acquisition of an additional one-third interest in MBFC Tower 3 is a highly strategic move for Keppel REIT. It deepens its exposure to Singapore’s core CBD, increases its market capitalisation, improves its index positioning, and provides exposure to a premium asset with strong fundamentals and potential upside. However, shareholders should be mindful of the potential DPU dilution resulting from the equity fund-raising, as well as the implications for NAV and leverage.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a solicitation to buy, sell, or hold any security. Investors should consult their own financial advisers before making any investment decisions. The information herein is based on publicly available sources as at the time of writing and may be subject to change.

View Keppel Reit Historical chart here