Keppel Land Unloads London Office Bldg

Keppel Land Unloads London Office Bldg For £73.6m

UNITED KINGDOM – Keppel Land is selling a 9-storey freehold office building in the City of London at 75 King William Street, according to a Singapore Exchange (SGX) filing released on Thursday (24 December, SGT).

The sale is being effected via the disposal of Keppel Land’s indirect wholly-owned subsidiary, West Gem Properties of a 100 percent interest in the property owner, First King Properties, for £73.6 million (S$131.1 million) in cold cash.

The acquirer is ZGC King William Holdings, which is entirely owned by London and Oxford Capital Markets.

Of the overall selling price, roughly £42.3 million (S$75.3 million) is payment for the sale of the shares, which is subject to completion adjustments. The remaining £31.3 million (S$55.8 million) is to repay shareholder loans extended to First King by Keppel Land’s unit Fleuters.

Keppel Land’s parent Keppel Corporation said the consideration for the sale of the shares took into account the adjusted net asset value of the stocks of £42.3 million as of 23 December 2020, based on the agreed value of the office building (£128 million).

Given that Keppel Land purchased the commercial property for £91 million in 2015, the gain on disposal is estimated to be around £6.8 million, including fair-value adjustment which will be recognised during the second half of the financial year ending 2020.

“Over the holding period, total profit for the investment since acquisition (including rental income and capital gains) is about £37.2 million,” noted Keppel Corporation.

The divestment is targeted to be concluded by Q1 2021. The transaction follows Keppel Land’s announcement on 23 December that it is selling the Keppel Bay Tower in Singapore to Keppel REIT for S$657.2 million, inclusive of rental support of as much as S$3.2 million.

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