Keppel Reit has acquired a 99.38% stake in T Tower, a freehold Grade A office building in Seoul’s CBD, according to the Reit manager, Keppel Reit Management. The agreed property value is KRW 252.6 billion ($301.4 million).
The remaining 0.62% stake will be acquired by a wholly-owned subsidiary of Keppel Capital Holdings, whose asset management arm in South Korea - Keppel Investment Management - will be appointed the local asset manager for the property.
T Tower is a 28-storey, nine-year-old office building with 228,000 sq ft in net lettable area. It is a five-minute walk from the city’s major railway station, Seoul Station. It is also located among amenities and major hotels, and close to key retail districts like Myeong-dong and Namdaemun.
The agreed property value is KRW 252.6 billion ($301.4 million) for T Tower (Picture: Keppel Reit)
The property is currently fully leased to tenants from technology, media and telecommunications, manufacturing and distribution, and services sectors. Notable tenants include Philips Korea, LG Electronics and SK Communications. It has a weighted average lease expiry of 2.8 years by NLA as at March 31, 2019. The majority of the leases in the property have fixed annual rental escalations of 3%.
The transaction will enable Keppel Reit to benefit from “potential capital value appreciation and rental growth amidst steady leasing demand and limited upcoming supply”, says Paul Tham, CEO of Keppel Reit Management.