Keppel REIT Launches S\$886.3 Million Underwritten Non-Renounceable Preferential Offering to Fund Major Acquisition

Key Highlights

• Keppel REIT is launching a non-renounceable preferential offering to raise gross proceeds of approximately S\$886.3 million.
• The issue price is set at S\$0.96 per New Unit, representing a 6.8% discount to the volume weighted average price (VWAP) of S\$1.0301 per unit (as of 10 December 2025).
• Allotment ratio: 23 New Units for every 100 existing Units.
• Purpose: Proceeds will be primarily used to partially finance the acquisition of an additional one-third interest in Marina Bay Financial Centre Tower 3 (MBFC Tower 3).
• The offering is fully underwritten by DBS Bank Ltd., Oversea-Chinese Bank Corporation Limited, and United Overseas Bank Limited.
• The offering is non-renounceable—allotments cannot be traded or transferred.
• The New Units will constitute approximately 23.9% of Keppel REIT’s existing issued units.

Details of the Preferential Offering

• Total New Units issued: 923,189,327.
• Eligibility: Only Unitholders with Singapore addresses (including certain QIBs and Scripholders) as at the record date, 22 December 2025, are eligible.
• Application period: 26 December 2025 (9:00 a.m.) to 9 January 2026 (5:30 p.m., or 9:30 p.m. for electronic applications).
• Listing and trading of New Units: Expected to commence on 19 January 2026.
• Excess applications: Entitled Unitholders may apply for excess New Units; preference will be given to rounding up odd lots, with directors and substantial shareholders ranking last in excess allotment priority.
• Irrevocable undertakings: Major Keppel-related entities (Keppel Ltd., KRIPL, KCIHPL, and KRML) have committed to fully subscribing for their entitlements, signaling strong sponsor support and confidence.
• Units rank pari passu: New Units will have equal rights, including distributions from 17 October 2025 onwards.

Use of Proceeds

• Approximately S\$875.6 million (98.8%) will partially finance the MBFC Tower 3 acquisition.
• Approximately S\$10.7 million (1.2%) will cover estimated fees and expenses related to the offering.
• Any balance will be used for general corporate and/or working capital purposes.
• If the acquisition does not proceed, net proceeds may be used for debt repayment, other acquisitions, capital expenditures, or working capital.

Strategic Rationale and Potential Share Price Impact

• Acquisition benefits:
  • Rare opportunity to increase stake in a prime Grade A office asset (MBFC Tower 3).
  • Deepening Keppel REIT’s presence in the core CBD, strengthening its Singapore portfolio.
  • Positive Singapore office market fundamentals, with no new office supply expected in Marina Bay area.
  • Potential to enhance Keppel REIT’s market capitalisation and trading liquidity.
• The preferential offering allows existing unitholders to participate in the REIT’s growth and expansion, aligning interests and potentially boosting investor confidence.

Important Notes for Shareholders

• Price sensitive: The issuance of new units at a significant discount, and the large increase in issued units, may affect the trading price and earnings per unit in the short term, but supports a major strategic acquisition.
• Dilution: The offering will increase the number of units in issue by approximately 23%, leading to potential dilution for non-participating unitholders.
• Strong sponsor support: The irrevocable undertakings from Keppel entities indicate a strong vote of confidence but also mean a significant portion of new units will be held by related parties.
• Eligibility restrictions: Foreign unitholders not registered in Singapore may not be eligible unless they provide a Singapore address at least three Market Days before the record date.
• Regulatory approval: Approval in-principle has been obtained from SGX-ST, subject to compliance with listing rules and requirements.

Indicative Timetable

Other Notable Details

• General Mandate: The New Units will be issued under the general mandate approved at Keppel REIT’s AGM on 16 April 2025. No further unitholder approval is required.
• Recent fundraising: In October 2025, Keppel REIT raised S\$113.0 million via private placement to acquire a 75% interest in Top Ryde City Shopping Centre, Sydney.
• Risk factors: The value of units and income may rise or fall. Units are not guaranteed by the manager or trustee, and are subject to investment risks, including possible loss of principal.

Conclusion

This preferential offering is a significant corporate action for Keppel REIT, supporting a major strategic acquisition in Singapore’s prime office market. While the discounted offering price and significant equity issuance may cause short-term dilution and affect share price, the strong sponsor backing and strategic rationale could enhance long-term value. Existing unitholders should carefully review the documentation and consider participating to avoid dilution.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should refer to the official documents issued by Keppel REIT and consult their financial advisors before making investment decisions. The value of investments can fluctuate, and past performance is not indicative of future results.

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