K-REIT Asia increases stake in Prudential Tower

K-REIT Asia has increased its stake in Prudential Tower to 93 per cent from 73 per cent.

Its trustee RBC Dexia Trust Services entered into a sale and purchase agreement with various parties to acquire levels 26 to 29 of the 30-storey building.

This was at a purchase price of about S$125.1 million inclusive of rental support.

Excluding the rental support, the effective purchase consideration is about S$117 million or S$2,430 per square foot.

The sellers are Innisvale Investments, Maraha, Lima Bintang and Mirabeau Gardens.

The acquisition is expected to be immediately accretive to K-REIT Asia’s distribution per unit.

It says the increased ownership interest will allow greater flexibility in managing the building.

Post-acquisition, K-REIT Asia will own over 223,800 square feet of Grade A net lettable area office space at Prudential Tower.

The committed leases in the property have a weighted average lease expiry of 3.6 years.

The acquisition will be funded entirely by debt.

When completed, it will increase K-REIT Asia’s aggregate leverage ratio from 37 per cent to about 39 per cent.

Source : Channel NewsAsia – 21 Mar 2011

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