Hongkong Land advances S$8 billion private real estate fund following Keppel Reit’s MBFC deal

[SINGAPORE] Hongkong Land on Friday (Dec 12) announced that it has made “significant advancements” towards the launch of its inaugural private real estate fund. This follows Thursday’s announcement of Keppel Reit’s planned acquisition of the group’s stake in Marina Bay Financial Centre (MBFC) Tower 3.

The new entity, called the Singapore Central Private Real Estate Fund (SCPREF), is expected to hold more than S$8 billion in assets under management (AUM) at its inception.

The fund will focus exclusively on managing prime commercial property assets in Singapore.

Keppel Real Estate Investment Trust (Reit) agreed to acquire Hongkong Land’s one-third interest in MBFC Tower 3 for around S$1.5 billion, the Reit manager announced on Thursday.

This price is 2 per cent above Hongkong Land’s independent valuation of the asset as at Jun 30, the company noted.

Under its contractual obligations, Hongkong Land offered its joint venture partners pre-emptive rights to purchase its stakes in One Raffles Quay, MBFC Towers 1, 2 and 3 prior to the fund’s formation. The deadline for acceptance was Thursday.

While Keppel Reit exercised its option for Tower 3, the pre-emptive offers for One Raffles Quay and MBFC Towers 1 and 2 have lapsed.

Hongkong Land thus plans to transfer its interests in these remaining assets, along with its 100 per cent interest in One Raffles Link, to the new fund, it said.

Combined, the assets designated for the fund held an attributable property value of S$3.9 billion as at Jun 30, representing around 3.2 million square feet of office space.

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Net proceeds from the sale of MBFC Tower 3 will increase Hongkong Land’s total capital recycling achieved since 2024 from US$2.1 billion to US$2.8 billion. This figure represents around 70 per cent of the group’s US$4 billion capital-recycling target set for 2027.

Hongkong Land stated that SCPREF is expected to launch with an AUM more than double the value of the seed portfolio provided by the company.

Equity commitments from third-party capital investors are currently in the final stage of documentation.

“The establishment of SCPREF is in line with the company’s strategy to grow its AUM to US$100 billion by 2035, with meaningful participation from third-party capital investors,” it said.

The group indicated that an announcement regarding the fund’s establishment is expected in Q1 2026.