Going, going, gone: KREIT sells Prudential Tower for $512m

That's 4.5% above valuation.

According to Barclays, KREIT has entered into agreements with companies held by KOP Limited, Lian Beng Group Ltd, KSH Holdings Limited and Centurion Global Ltd for the sale of its 92.8% interest in Prudential Tower (the property) for S$512.0 mn, and has received an initial deposit of $25.6 mn.

Here's more:

The sale price of $512.0mn (S$2,316psf) is 4.5% above the latest valuation of the property of S$490.0 mn (S$2,215psf). It also represents a 46.7% premium over Keppel REIT’s original purchase price of the property of S$349.1mn. With a net lettable area (NLA) of 221,080sf, the property constitutes 7.1% of KREIT’s total portfolio by NLA.

According to the company, a substantial amount of the sale proceeds will be used to repay existing debt to provide KREIT with greater financial flexibility, with the remaining amount to be used for general corporate and working capital purposes and/or for pursuing acquisition opportunities.

Assuming divestment was completed on 31 Dec 2013, KREIT’s proforma aggregate leverage will decline from 42.1% to 38.8%, assuming S$425mn of proceeds are used to repay borrowings, and proforma DPU will be lower at 7.67cts post divestment from 7.88cts.

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