Keppel Reit Expands Portfolio with A$363.8 Million Sydney Office Acquisition

Keppel Real Estate Investment Trust (Reit) has entered into an agreement to acquire a 50% interest in a Grade A office building located in Sydney's central business district (CBD) for A$363.8 million (S$321 million). The remaining interest will be retained by the seller, Mirvac Funds Management Australia Limited.

The property at 255 George Street is anticipated to yield over 6% in the first year and contribute a distribution per unit accretion of 1.4% on a pro-forma basis. With a committed occupancy rate of 93% as of December 31, 2023, and no significant lease expiries until 2028, the property offers stable cash flows with a weighted average lease expiry of 6.8 years.

Following this acquisition, Keppel Reit's portfolio, predominantly Singapore-centric, will increase to approximately S$9.6 billion across 13 properties in Singapore, representing 76.5% of its total assets under management (AUM). The proportion of freehold assets in its portfolio will rise from 33.2% to 36.4%.

This strategic move strengthens Keppel Reit's existing partnership with Mirvac, as they already co-own properties in Sydney and Perth.