Keppel Land, the Singapore- based developer controlled by Keppel Corp., agreed to sell its stake in the first phase of Marina Bay Financial Center to K- REIT Asia for $1.43 billion, as part of a swap agreement.

Keppel Land will book a net gain of about $321 million from the sale of its one-third stake in the two office towers, it said in a statement today. Keppel Land will buy two properties, Keppel Towers and GE Tower, from K-REIT for $573 million for redevelopment into about 620 premium residences.

 

The swap deal, which will boost K-REIT Asia’s assets to about $3.4 billion from $2.5 billion, will mean 90% of its assets will be located within Singapore’s Raffles Place and the Marina Bay precinct, Chief Executive Officer Ng Hsueh Ling said in the statement.

 

K-REIT Asia will pay with borrowings from six or seven banks, funds from last year’s rights offering and proceeds from the sale of properties to Keppel Land, Ng said at a press meeting in Singapore today. She didn’t name the banks.

K-REIT Asia is 76% owned by Keppel Land and Keppel Corp., while Keppel Land is 52% owned by Keppel Corp.

 

For Keppel Land, the deal is a “good opportunity” to increase land holdings for potential redevelopment, Chief Financial Officer Lim Kei Hin said at a press event in Singapore. “The transaction will give us firepower in the arsenal to look for opportunities for commercial and residential sectors.”

 

Lim said Keppel Land will focus on opportunities in Singapore, China, Vietnam, Indonesia and India.

 

The second phase of the Marina Bay Financial Center is still under development and there are no plans to do a similar deal with that part yet, Lim said.