Keppel Capital To Launch A$1bn Wholesale Property Fund in Australia


Keppel Capital Ventures Pte. Ltd., a wholly-owned subsidiary of Keppel Capital Holdings Pte. Ltd. (Keppel Capital), the asset management arm of Keppel Corporation Limited, has entered into a Memorandum of Understanding (MOU) with Vicinity Centres (Vicinity), a leading Australian retail property group listed on the Australian Securities Exchange, to establish a new private fund.

According to a report, the proposed fund intends to invest in an initial A$1 billion portfolio of Australian retail properties currently owned by Vicinity. The MOU is subject to due diligence, definitive documentation and final board approvals of both parties.

The parties intend to manage the proposed fund through a joint venture where Keppel Capital and Vicinity will each hold a 50% stake. Vicinity is expected to initially inject approximately A$1 billion of retail assets located across five Australian states into the proposed fund, and continue to provide property and development services for these assets.

Each party is expected to initially hold up to a 10% equity interest in the proposed fund, which is targeted to close by the end of the first quarter in 2019.

The ongoing investment strategy of the proposed fund will be to own, acquire and grow a diversified portfolio of Australian retail assets with stable yields and potential long-term capital growth, underpinned by high occupancy rates, balanced lease expires and a diversified tenant base predominantly focused on non-discretionary spending.

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