Is Keppel Reit’s deal Down Under a good move?

Prime office landlord may continue diversifying geographically and across real estate asset classes to expand its portfolio

Unitholders of Keppel Reit may have mixed feelings about its recently announced purchase of a 75 per cent stake in a freehold retail mall in Australia.

On the one hand, the deal has been billed as a strategic expansion by Keppel Reit into the retail property sector that promises to boost its distributions per unit (DPUs) and enhance the resilience of its portfolio.

On the other hand, the acquisition will further dilute Keppel Reit’s exposure to Singapore’s prime office property sector – which is arguably the most attractive aspect of its portfolio to many local investors.