Keppel to Divest 51% of Keppel South Central to Keppel REIT for S$611M

Keppel Ltd. has agreed to divest a 51% interest in K-Commercial Pte. Ltd., the owner of the Keppel South Central commercial building, to Keppel REIT for approximately S$611 million. The transaction, announced on October 20, 2026, aims to unlock capital for Keppel and bolster Keppel REIT’s Singapore portfolio.

The consideration comprises approximately S$149 million for the sale of the shares and approximately S$462 million for the repayment of a loan extended to K-Commercial Pte. Ltd. by Keppel. The agreed property value of Keppel South Central is approximately S$626.2 million, or S$2,350 per square foot of net lettable area. The deal is structured with an income support arrangement for Keppel REIT and includes a call option allowing Keppel to re-acquire the 51% stake after 70 years.

Keppel intends to use the proceeds from the divestment to reduce debt and reinvest capital into opportunities offering higher returns, aligning with its ongoing asset monetization strategy. The transaction brings Keppel’s year-to-date asset monetisation to S$3.7 billion. Keppel will retain a 49% stake in K-Commercial Pte. Ltd. and continue to provide property management services for Keppel South Central, maintaining exposure to the asset’s long-term performance.

Keppel South Central, a 33-story Grade A commercial building completed in January 2025, currently has a committed occupancy rate of approximately 60%, with an additional 20% of space under negotiation. The sale is contingent on approval from Keppel REIT unitholders at an extraordinary general meeting, with completion anticipated in the second quarter of 2027. The transaction is not expected to materially impact Keppel Ltd.’s net tangible asset per share or earnings per share for the current financial year.

As of October 15, 2026, Keppel South Central’s tenants include Manulife Financial Advisers, Industrious, and the Competition and Consumer Commission of Singapore. The building boasts certifications for sustainability and smart-building capabilities, including BCA Green Mark Platinum Super Low Energy, WiredScore Platinum, and SmartScore Platinum.