K-REIT Asia increases asset under management to about $1.62 billion through acquisition of one-third interest in One Raffles Quay

K-REIT Asia Management Limited, as manager of K-REIT Asia, is pleased to announce that K-REIT Asia, through its trustee, RBC Dexia Trust Services Singapore Limited, has entered into a conditional share purchase agreement with Boulevard Development Pte Ltd (Boulevard) for the acquisition of one-third of the issued share capital of One Raffles Quay Pte Ltd (ORQPL).

ORQPL, developer and owner of One Raffles Quay, is held equally by Freyland Pte Ltd, Comina Investment Limited (Comina) and Boulevard, which are wholly-owned subsidiaries of Hongkong Land International Holdings Limited, CKH China Enterprises Limited and Keppel Land Properties Pte Ltd respectively.

The consideration for the acquisition was negotiated on a willing-buyer and willing-seller basis and on normal commercial terms. It is based on ORQPL’s adjusted net tangible asset value after taking into consideration the agreed market value of the one-third interest of the property (including provision of income support) at $941.5 million as determined by independent property valuers.

Boulevard will provide an income support of up to $103.4 million through 2011. The transaction is expected to be yield-accretive for K-REIT Asia.

Upon completion of this acquisition which is expected to take place no later than 31 December 2007, K-REIT Asia’s portfolio size will increase from 786,603 sf to approximately 1.23 million sf of prime office space based on the one-third interest in One Raffles Quay. K-REIT Asia’s assets under management will also more than double from $677 million as at 31 December 2006 to about $1.62 billion at completion.

Prof Tsui Kai Chong, Chairman of K-REIT Asia, said, "The acquisition of One Raffles Quay, the gateway to Singapore’s new downtown at Marina Bay is a significant step for K-REIT Asia. This acquisition will strengthen K-REIT Asia’s position as an office-focused commercial REIT.

"K-REIT Asia's performance has exceeded its forecast since its listing with its portfolio of prime office buildings and Singapore’s rising office market. Our unitholders can expect to continue to enjoy strong and steady distribution pay-out as our buildings are all about 100% occupied, with expected positive rental reversions."

Located in Singapore’s new financial and business district, One Raffles Quay comprises a 50-storey office tower and 29-storey office tower and has a net lettable area about 1.3 million square feet. Fully occupied, One Raffles Quay’s major office tenants include ABN Amro, Barclays Capital, Deutsche Bank, Credit Suisse, Ernst and Young and UBS AG.

The financing plan for the acquisition, including the issuance of new units as well as possible debt financing, will be announced at the appropriate time.

The acquisition is subject to and conditional upon, among others, the approval of the unitholders of K-REIT Asia at an extraordinary general meeting, the shareholders of Keppel Land Limited at an extraordinary general meeting, and approvals from the relevant authorities.

Concurrently, CKH China Enterprises Limited, through its subsidiary, has also entered into a conditional share purchase with HSBC Institutional Trust Services (Singapore) Limited, Suntec Real Estate Investment Trust’s trustee (Suntec REIT), to sell all its shares in Comina to Suntec REIT. Both acquisitions are not inter-dependent and therefore the completion is not conditional on, or subject to completion of each other.

Contact Information:

Media Relations
Ms Teri Liew
Senior Manager
Group Corporate Communications
Keppel Corporation
Mobile : 9686 4038

Investor Relations
Ms Serena Toh
AGM, Investor Relations & Research
Keppel Land Limited
Tel : 6433 7546

Attachments:

Presentation Slides on One Raffles Quay