Keppel REIT Management Limited briefed retail investors on Dec, 30 2025 about its plan to acquire an additional one-third interest in Marina Bay Financial Centre (MBFC) Tower 3, confirming the move will be “not immediately” distribution per unit (DPU) accretive but is expected to boost returns over time.

Chief Executive Officer Chua Hsien Yang said the asset’s current passing rent of “about 12-plus” Singapore dollars per square foot (psf) is roughly 10 percent below the Marina Bay average of 13.49 Singapore dollars psf, providing scope for rental uplift as 30 percent of leases mature in the next two years. Signing rents achieved in the third quarter of 2025 already exceed the breakeven level required for DPU neutrality, assuming an asset-level interest rate of 2.2 percent.

To fund the 2.3 billion Singapore dollars purchase, the manager is drawing on a short-term equity bridge loan for 40 percent of the price, which will lift pro forma aggregate leverage to 49.9 percent, just under the Monetary Authority of Singapore’s 50 percent cap. The remaining 60 percent will be covered by a preferential equity offering.

Keppel REIT opted to exercise its pre-emptive right only on MBFC Tower 3—where DBS Bank is the anchor tenant—citing leverage constraints that precluded simultaneous bids for MBFC Towers 1 and 2 and One Raffles Quay.

CFO Sebastian Song explained that the pro forma post-acquisition DPU of 4.42 cents should be compared with an adjusted fiscal-year 2024 DPU of 4.72 cents, which excludes anniversary distributions and reflects the current fee structure.

Management outlined three initiatives to enhance returns: capturing higher market rents upon lease renewals, converting the asset into a limited liability partnership to secure annual tax savings of 8 million to 10 million Singapore dollars, and lowering borrowing costs through planned asset divestments and refinancing as interest rates ease.

The board, comprising a majority of independent directors, approved the transaction after assessing asset quality, market conditions and potential long-term value. Acquisition fees will be paid in units to align the manager’s interests with those of unitholders.

The manager reiterated confidence in Singapore’s office market, highlighting limited new Central Business District supply for at least the next five years and a declining Grade A vacancy rate—down to 5.1 percent in the third quarter of 2025. It also pledged to pursue divestments in 2026 to reduce leverage and maintain stable distributions for investors, despite recent unit price volatility following the deal announcement.