Keppel REIT Takes a Small Step Into the Big Tokyo Office Market; Maintaining SGD 1.16 FVE

Keppel REIT, or KREIT, will be acquiring a boutique office building located in Tokyo’s Chuo ward with its sponsor, Keppel Capital, for a total purchase consideration of JPY 8.97 billion. KREIT’s effective stake will be 98.47%. Although the deal is relatively small, making up only 1% of KREIT’s assets under management on completion, it marks KREIT’s entry into Tokyo, Japan, the biggest central business district, or CBD, office market in the Asia-Pacific region. The property is only 36.3% occupied and management expects it to achieve a net property income, or NPI, yield of 3.1% when it is fully leased, giving a distribution per unit, or DPU, accretion of 0.5% on a pro forma basis, assuming the acquisition was completed from Jan. 1, 2021.