Singapore-listed commercial landlord Keppel REIT (SGX:K71U) has entered into agreements with companies held by KOP Limited, Lian Beng Group, KSH Holdings Limited and Centurion Global for the sale of its 92.8% interest in Prudential Tower for SGD512.0 million.

Keppel REIT is said to have been looking for a buyer for the 30-storey property since January 2014. It has received an initial deposit of $25.6 million for the sale from the prospective buyers.

The sale price of SGD512.0 million is 4.5% above the latest independent valuation of the property of SGD490.0 million. It also represents a 46.7% premium over Keppel REIT's original purchase price of the property of SGD349.1 million.

Keppel REIT has indicated that it will use proceeds from the sale to repay existing debt and reduce its gearing from 42.1% to 38.8%. Management of the REIT has also said that it may use part of the proceeds for possible acquisitions.

Following the divestment, Keppel REIT's portfolio in Singapore will be reduced to four office buildings. They are namely the 99% interest in Ocean Financial Centre, a one-third interest in Marina Bay Financial Centre Phase One comprising Towers 1, 2 and Marina Bay Link Mall, a one-third interest in One Raffles Quay, and Bugis Junction Towers. All properties are 100% committed.

The sale of Prudential Tower is expected to be completed on 26 September 2014. Units of Keppel REIT closed the trading day 0.8% higher to end at SGD1.24 on the Singapore Exchange.