Mapletree Selling Singapore Office Park to Keppel Education Fund for $119M

Singapore’s commercial real estate market continues to show signs of revival with Mapletree Investments having agreed to sell a suburban office asset to a Keppel-managed fund for S$160 million ($118.5 million), according to sources familiar with the transaction who spoke with Mingtiandi.

A Mapletree subsidiary late last month signed a put-and-call option deal with Keppel Education Asset Fund (KEAF) for 20 Harbour Drive, a 1998-vintage asset in western Singapore’s Pasir Panjang area, the sources informed Mingtiandi, confirming earlier reporting by The Business Times. The deal values the property, which has 144,236 square feet (13,400 square metres) of net lettable area, at S$1,109 per square foot.

Also known as PSA Vista, the eight-storey building is currently occupied in part by PSA Institute, a training provider for skilled workers in Singapore’s port and terminal industries, with the Keppel fund said to be considering repositioning the asset as an international school campus. Educator Middleton International School also occupies the building for its west coast location.

Keppel closed on over S$450 million in capital for its Keppel Education Asset Fund (KEAF) in 2022, with the vehicle having purchased a pair of properties in Sydney last year after earlier acquiring properties in Singapore and Japan.

Room to Grow

20 Harbour Drive occupies a 138,835 square foot site around five minutes’ walk from Haw Par Villa MRT with over 72 years remaining on the land tenure. Zoned for commercial use, there is said to be potential to expand the property’s 250,000 square feet of gross floor area, should the new owner win approval from regulators.

Online listings show space available in 20 Harbour Drive at asking rents of S$4.85 per square foot, with the asset overlooking the Pasir Panjang terminal described as offering ocean views.

Mapletree is said to be disposing of the balance sheet asset in a move to recycle capital from a property seen as non-core, at the same time that Keppel looks to expand its education fund.

“We do not comment on market talk,” a Keppel spokesperson said in response to inquiries from Mingtiandi, while Mapletree representatives declined to comment. JLL is understood to have acted as the exclusive advisor on the transaction, with representatives of the property consultancy also declining to comment on the deal.

In addition to PSA Institute and Middleton International School, online listings show real estate firm Kingsford Development, renewables firm G8 Energy, and Collyer Logistics as occupying the property.

Education Fund Expands

Keppel had announced Australian acquisitions on behalf of the Keppel Education Asset Fund in October last year, with the company pointing to growing demand for quality educational facilities in Asia Pacific.

“The demand for quality schools and campuses in Asia Pacific continues to be well supported by macrotrends including rapid urbanisation, an expanding middle class and rising affluence, as well as a continued focus on high-quality education,” Christina Tan, chief executive officer for fund management and chief investment officer at Keppel said in a statement at the time.

The deals announced in October included a 115,174 square foot Sydney campus leased to the University of New South Wales, which it had acquired from Charter Hall Group in August. The fund also picked up a seven-storey commercial building in North Sydney’s central business district under a forward purchase deal, for conversion into an independent kindergarten to 12th grade school campus.

Keppel Education Asset Fund seeks to work with established education operators to capitalise on the growing opportunities in the private education sector in the key cities in Asia Pacific, according to a statement on the Keppel website.

The vehicle primarily adopts a value-add approach, but also seeks development opportunities with the goal of creating a balanced portfolio of brownfield and greenfield assets while working with established education operators, according to the company.

Note: An earlier version of this story indicated that two properties acquired by Keppel Education Asset Fund in 2023 were the fund’s first assets. The article has been updated to show that the vehicle had earlier acquired properties in Singapore and Japan. Mingtiandi regrets the error.