Broker Name: Maybank Research Pte Ltd
Date of Report: December 12, 2025
Excerpt from Maybank Research Pte Ltd report.
Report Summary
- Keppel REIT (KREIT) has acquired an additional one-third stake in MBFC Tower 3, a prime Singapore CBD office, for SGD937.5m, mainly funded by a SGD886.3m rights issue.
- The acquisition increases KREIT’s Singapore portfolio weighting to 79% and boosts its exposure to Grade A office assets with high occupancy (99.5%) and a strong tenant base.
- The deal is initially dilutive: FY26 and FY27 DPU forecasts are cut by 12.8% and 13.9%, and NAV is diluted by 4.7%, resulting in a lower target price of SGD1.0 and a downgrade to HOLD.
- Despite the dilution, potential upside exists from positive rent reversions, the trend for higher quality office space, and possibly lower interest rates, though timelines are uncertain.
- Gearing remains high at 41.9%, and forward yield is expected to fall below 5%.
- Concerns include execution risks from new retail asset exposure in Australia, high tenant concentration in the new retail asset, and limited management fee disclosure.
- KREIT maintains strong ESG credentials, with green certifications on most properties, and robust governance and diversity initiatives.
above is an excerpt from a report by Maybank Research Pte Ltd. Clients of Maybank Research Pte Ltd can be the first to access the full report from the Maybank Research Pte Ltd website : www.maybank-keresearch.com
