[SINGAPORE] Lendlease Global Commercial Reit will be divesting the office component of the Juong commercial-retail development Jem to Keppel for S$462 million, with the proceeds to be used to pay down debts and potentially for distribution to unitholders.
In a regulatory statement published on Monday (Aug 4), the manager of the real estate investment trust (Reit) announced that the trustee entered into a put and call option agreement with the purchaser on Monday.
Currently, the 12-level office space – which the Reit acquired in 2022 – is leased to the Ministry of National Development for 30 years from December 2014.
Net proceeds from the divestment will be used to predominantly repay certain loans, and this is expected to reduce the Reit’s aggregate leverage ratio to approximately 35 per cent on a pro forma basis from 42.6 per cent as at June 2025.
The divestment could result in a net cash gain of approximately S$8.9 million, which will be available for distribution to unitholders.
The manager said that key benefits of the divestment include improving the Reit’s financial position, unlocking value of the office component, and increasing the Reit’s focus on retail to over 85 per cent of its portfolio by valuation
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Had the divestment been completed on Jul 1, 2024, the pro forma distribution per unit (DPU) would have been S$0.0352 Singapore cents, 2.2 per cent lower than S$0.036 cents before the sale. Had the divestment been completed in end-June, 2025, the net asset value per unit would have been S$0.74, marginally lower than S$0.75 before the sale.
Keppel said in a media statement that private funds under its sustainable urban renewal strategy are acquiring the office component of Jem, and the asset manager and operator will explore upgrading works to reduce the energy use intensity.
Keppel’s earnings per share and net tangible assets per share for the current year are not expected to be materially impacted by the acquisition, it said.
Lendlease Global Commercial Reit units closed 2.7 per cent or S$0.015 higher at S$0.565 while Keppel shares closed S$0.04 or 0.5 per cent higher at S$8.35 on Monday, before this announcement.
