SINGAPORE - Keppel REIT has agreed to sell its 92.8 per cent stake in Prudential Tower, a 30-storey office building near Raffles Place MRT station, for S$512 million - which is 4.5 per cent above valuation.

The buyers are companies held by KOP, Lian Beng Group, KSH Holdings and Centurion Global, Keppel REIT said on Thursday. A substantial amount of the sale proceeds will be used to repay debt to provide the trust with greater financial flexibility, it added.

Keppel REIT said the divestment was also in line with efforts to review and evaluate its assets to optimise the trust’s portfolio.

Prudential Tower, a 99-year leasehold Grade A office building, is about 16 years old and presently fully occupied. The acquisition amount is for an aggregate strata area of about 230,700 square feet.

The sale price is S$162.9 million higher than Keppel REIT’s original purchase price of S$349.1 million. Keppel REIT said it expected to recognise an estimated gain of S$9 million over the book value of S$490 million as at 31 December 2013.

The buyers said in a joint statement: “The consortium views the acquisition as a good opportunity to participate in a strategic investment with recurring rental income and subsequent strata sales of a Grade A office building located at the Raffles Place precinct.”

The sale of Prudential Tower is expected to be completed on Sept 26. – CHANNEL NEWSASIA