Lendlease Global Commercial REIT divesting office component of Jem to Keppel's fund for $462 mil

Nicole Lim

/ The Edge Singapore

August 4, 2025 10:24 PM SGT

propertyeditor@edgeprop.sg

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The 12-storey office component of Jem in Jurong East has been sold to Keppel's Sustainable Urban Renewal strategy for $462 mil (File photo: The Edge Singapore)

Lendlease Global Commercial REIT (LREIT) announced on Aug 4 that it is divesting the office component of Jem, which comprises 12 levels of office space. This decision was made in relation to current gearing levels of the REIT.

The divestment consideration is $462 million, and Keppel's Sustainable Urban Renewal (SUR) strategy is the buyer of the asset. Jones Lang LaSalle is the independent valuer for the office component of Jem for the divestment.

The estimated total cost of the divestment is approximately $5.0 million, comprising the divestment fee of approximately $2.3 million payable to the manager for the divestment, and the estimated professional and other fees and expenses incurred, which are about $2.6 million.

The net cash proceeds from the divestment is estimated to be $459.4 million, resulting in an estimated net cash gain over the cost of investment of approximately $8.9 million.

The manager of LREIT intends to use net proceeds to repay certain loans, which is expected to reduce its aggregate leverage ratio from 42.6% as at June 30, to approximately 35% on a pro forma basis and potentially distribute net cash gain on disposal.

The manager of LREIT believes that this divestment will improve the REIT’s financial position and strengthen capital structure; enhance financial flexibility to support the REIT’s potential portfolio growth; and increase the REIT’s focus on Singapore retail.

Keppel says that its SUR strategy invests in value-add real estate opportunities with the goal of decarbonising the built environment, while delivering attractive risk-adjusted returns to limited partners. In April 2025, Keppel secured $760 million in new capital commitments for its SUR strategy, including from one of Europe’s largest pension funds, bringing the strategy’s cumulative Funds under Management 1 (FUM) to approximately $4.3 billion.

Currently, the office asset is fully leased to the Ministry of National Development of Singapore. Keppel intends to explore undertaking targeted upgrading works aimed at reducing the property’s energy use intensity, in line with the SUR strategy’s decarbonisation goals.

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