Keppel Corp. Places REIT Stake With Goldman Sachs

Keppel Corp., the world’s largest oil-rig maker, said its subsidiary has placed a 6.7 percent stake worth S$279.9 million ($223 million) with Goldman Sachs Group Inc.

Goldman Sachs (Singapore) Pte, which is acting as the placement agent, will purchase 180 million units of the real estate investment trust for S$1.555 per unit, according to a statement to the Singapore stock exchange yesterday.

Prime-office rents in Singapore may climb 13 percent per annum in the two years to 2016, according to a May 3 report by Standard Chartered Plc. Keppel REIT is the largest landlord of office assets in the island city, the bank said.

Keppel REIT owns the highest-quality office portfolio among office SREITs, Standard Chartered’s analysts Kai Yip and Regina Lim wrote in the note. Prime-office buildings, such as Ocean Financial Centre, One Raffles Quay and Marina Bay Financial Centre Towers 1 and 2, make up 80 percent of its portfolio’s 2.37 million square feet (220,180 square meters) of net leasable area, according to the note.

With the sale, Keppel Corp. will cut its stake in the REIT to 51.5 percent, according to the statement. The sale will be completed by May 27, the company said.

Keppel REIT shares dropped as much as 3.4 percent to S$1.550, and traded at S$1.555 at 9:02 a.m. local time, heading for the biggest drop since July 20. The trust has gained 20 percent this year compared with the 13 percent advance in the FTSE Strait Times Real Estate Investment Trust Index.

(Corrects story published May 21 to show Goldman is acting as placement agent in second paragraph.)
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