ARA Trust Management (Suntec), as manager of Suntec Real Estate Investment Trust (Suntec REIT), says HSBC Institutional Trust Services (Singapore), as trustee of Suntec REIT, has entered into a conditional share purchase agreement with Choicewide Group, Cavell Limited and Hutchison Whampoa Properties to acquire a one-third interest in Marina Bay Financial Centre Towers 1 and 2, the Marina Bay Link Mall and 695 car park lots  through the acquisition of one-third of the issued share capital of BFC Development.

The agreed consideration for the one-third interest in the MBFC Property is $1.5 billion, inclusive of income support of $113.9 million (inclusive of GST) payable over 60 months to be provided by the vendor.

Excluding the income support, the effective purchase consideration is $1.3978 billion, which is equivalent to $2,400 per sq ft.

The manager says the MBFC property is a strategic addition to its existing portfolio within Singapore’s Central Business District, and will increase Suntec REIT’s office portfolio net lettable area (NLA) from 1.9 million sq ft to approximately 2.4 million sq ft, providing Suntec REIT’s unitholders (Unitholders) with an increased exposure to the strengthening Singapore office market. It will also provide further income diversification to Suntec REIT.

The manager is currently reviewing various financing options for the acquisition to determine an optimal capital structure for the Acquisition. Details for the financing structure will be set out in the circular to be issued to unitholders in due course, together with a notice of an extraordinary general meeting of unitholders, for the purpose of seeking the approval of unitholders for the acquisition.

The acquisition is expected to improve the earnings and distributions for unitholders, and is targeted for completion by the last quarter of FY 2010. Upon completion, Suntec REIT’s total assets under management would increase to approximately $6.821billion.

Commenting on the acquisition, Yeo See Kiat, Chief Executive Officer of the manager, says, “This is an excellent opportunity to invest in an iconic landmark development and strengthen our foothold in the Marina Bay growth corridor. The high occupancy of the MBFC Property would provide a stable and sustainable income stream which would in turn, further enhance the income diversification of Suntec REIT. The high quality attributes of the MBFC Property would offer a good long-term growth potential for our unitholders.”