Keppel to divest 51% stake in Keppel South Central for about S$611 million to Keppel REIT

Proposed divestment brings Keppel’s announced asset monetisation to S$3.7 billion year to date 2026.

Keppel Ltd., through its Real Estate Division (“Keppel”), has entered into an agreement to divest a 51% interest in K-Commercial Pte. Ltd., which owns Keppel South Central, a premium Grade A commercial building at 10 Hoe Chiang Road, to Keppel REIT for approximately S$611 million.

Keppel REIT will pay a total consideration of approximately S$611 million (subject to completion adjustments), comprising approximately S$149 million as consideration for the sale shares and approximately S$462 million for repayment of a loan extended to K-Commercial Pte. Ltd. by Keppel. The consideration was arrived at on a willing-buyer, willing-seller basis, taking into account, among others, the agreed property value of Keppel South Central attributable to the sale shares for a 70-year leasehold interest, which was approximately S$626.2 million as at 30 September 2026, or approximately S$2,350 per sf of net lettable area. The transaction also includes an income support arrangement.

Following the divestment, which is expected to be completed in 2Q 2027, Keppel will retain a 49% stake in K-Commercial Pte. Ltd., with its Real Estate Division continuing to provide property management and leasing services to Keppel South Central. Keppel will also have a call option to re-acquire the 51% equity stake for a nominal consideration after 70 years, subject to the terms of the call option.

Mr Louis Lim, CEO, Real Estate of Keppel, said, “The proposed divestment marks another step in Keppel’s transformation of its real estate portfolio. Since its redevelopment in 2020, Keppel South Central has delivered strong returns including fair value gains, generating more than $380 million in total profits for Keppel. The transaction is in line with Keppel’s asset monetisation strategy, enabling us to unlock capital that can be redeployed into higher-return opportunities, reduce debt and reward shareholders.

“The transaction will also bring Keppel South Central into Keppel’s asset management ecosystem, strengthening Keppel REIT’s Singapore portfolio, while contributing to the growth of our funds under management. By retaining a core co-investment stake of 49% alongside the REIT, Keppel will continue to participate in the asset’s long-term growth, while the option to re-acquire the 51% stake preserves optionality to unlock further upside from this prime freehold asset.”

Completed in January 2025, Keppel South Central is a 33-storey Grade A commercial building located in Tanjong Pagar, at the gateway to the Greater Southern Waterfront. Designed by NBBJ, it has a net lettable area of approximately 522,500 sf and combines smart-building capabilities with super-low-energy design. It has attained BCA Green Mark Platinum Super Low Energy, WiredScore Platinum and SmartScore Platinum certifications, and is WELL Core pre-certified.

As at 15 October 2026, committed occupancy stood at approximately 60%^[1], with a further 20% of space under negotiation. Tenants include Manulife Financial Advisers, Industrious and the Competition and Consumer Commission of Singapore.

The proposed transaction is subject to, among others, approval by Keppel REIT unitholders at an extraordinary general meeting.

The above-mentioned transaction is not expected to have any material impact on the net tangible asset per share or earnings per share of Keppel Ltd. for the current financial year.

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About Keppel Ltd. 

Keppel Ltd. (SGX:BN4) is a global asset manager and operator with strong expertise in sustainability-related solutions spanning the areas of infrastructure, real estate and connectivity. Headquartered in Singapore, Keppel operates in more than 20 countries worldwide, providing critical infrastructure and services for renewables, clean energy, decarbonisation, sustainable urban renewal and digital connectivity. Keppel creates value for investors and stakeholders through its quality investment platforms and diverse asset portfolios, including private funds and listed real estate and business trusts.

^[1] Includes committed leases and leases which are in the process of documentation.