Suntec REIT acquiring one-third stake in Marina Bay Financial Centre

Suntec Real Estate Investment Trust (Suntec REIT) is acquiring a one-third stake in Marina Bay Financial Centre for S$1.5 billion.

Under the transaction, Suntec REIT will purchase Marina Bay Financial Centre Tower 1 and 2, the Marina Bay Link Mall and 695 car park lots.

The REIT has entered into a conditional share purchase agreement for the property with Choicewide Group Limited, Cavell Limited and Hutchinson Whampoa Properties Limited.

The agreed consideration for the one-third interest is S$1495.8 million.

Suntec REIT said details of the financing structure will be sent out to unitholders in due course.

Some analysts MediaCorp spoke with said the REIT paid a fair market price.

However, they did note that the price was slightly above K-REITs recent purchase from Keppel Land.

Upon completion of the deal, Suntec REIT’s total assets under management will increase to approximately S$6.8 billion.

The acquisition will increase Suntec REIT’s office portfolio net lettable area to 2.4 million square feet from 1.9 million.

The Marina Bay Financial Centre property has many big-ticket tenants – including American Express, Barclays, Nomura and Standard Chartered Bank – and it has a committed occupancy of around 95 per cent.

Going forward, analysts said they expect Hong Kong Land to make a similar announcement on the remaining one-third stake of Marina Bay Financial Centre, completing the full disposition process for Marina Bay Financial Centre phase one.

Earlier on Tuesday, Suntec REIT reported that distribution income for the third quarter 2010 ended September 30 was S$46.2 million, and the distribution per unit was 2.502 cents.

Source : Channel NewsAsia – 26 Oct 2010

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