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# Keppel REIT’s proposed S$611m office deal includes seller-backed income
- URL: https://www.southeastasiaconnect.com/keppel-reit-south-central-proposed-stake-unitholder-review/
- Published: 2026-10-20T07:33:06.000Z
- Updated: 2026-10-20T11:22:18.000Z
- Description: Seller support would protect about S$2.23m in monthly income for the trust’s stake as South Central leases up; the arrangement can last up to five years.
- Author: Southeast Asia Editorial Team
- Tags: News, #google-news, Singapore, Real Estate

[Keppel REIT](https://www.keppelreit.com/?ref=southeastasiaconnect.com) is proposing a S$610.9 million investment in Singapore’s Keppel South Central with a seller-funded income floor while the office tower builds occupancy. The arrangement would top up the trust’s share of adjusted net property income to about S$2.23 million a month when it falls short, for up to five years after completion.

The Singapore-listed property trust would acquire a 51% interest in a 70-year leasehold interest in the 33-storey building at Tanjong Pagar. Its 20 October filing puts occupancy at approximately 60% as at 15 October, including leases still being documented. That measure is higher than the 52.7% reported at 30 September on the same basis; committed leases alone accounted for 48.8% at that earlier date.

The support addresses the gap between a building still being leased and the income assumed once it is more fully occupied. The filing bases the arrangement on estimated rent of S$11.15 per square foot per month and a stabilised occupancy level of 95%. After an assumed 79% operating margin, the guaranteed monthly amount for the trust’s 51% share is S$2,230,170.

The seller would pay the shortfall whenever that share of adjusted net property income is below the floor. If actual income is higher, the trust receives the higher amount. The floor therefore supports income during the leasing period; it is not evidence that tenants already generate that amount.

Support starts on completion and can end before five years. The early termination test combines at least 95% occupancy under qualifying office and retail tenancies, commenced and fully income-generating leases, and adjusted net property income reaching the guaranteed amount. It also ends if the trust ceases to hold its interest.

The manager expects an initial net property yield of approximately 4.3%, including the income support arrangement. That projected yield therefore combines the property’s income with seller support; it is not a measure of rent generated by tenants alone.

The income protection sits alongside a substantial funding commitment. Estimated purchase consideration of S$610.9 million covers shares and loans and remains subject to adjustments. Total acquisition cost is S$627.1 million including fees and expenses, while the agreed value of the 51% property interest is S$626.2 million.

The manager plans a combination of bank loans, perpetual securities, internal cash and/or equity financing, with the final mix decided nearer completion. Perpetual securities have no fixed maturity date. Although the underlying property is freehold, the transaction includes an option for the seller to buy back the relevant interest for S$1 after 70 years.

Completion is expected in the second quarter of 2027, subject to unitholder and relevant tax approvals and an occupancy condition. That condition requires at least 51% committed office and retail occupancy at average rent of at least S$11.15 per square foot per month. A circular and meeting notice will follow, including an independent assessment of the transaction and income support.

**Sources:** [Keppel REIT proposed acquisition filing, 20 October 2026](https://wpcms.keppel.com/wm/cms-site/kpl/file/media/2026/oct/20-oct-kreit/keppel-reit-acquisition-announcement.pdf?ref=southeastasiaconnect.com).