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Investor FAQs

A. Company Information

  1. What is Keppel REIT?
  2. How is Keppel Land related to Keppel REIT?
  3. What is Keppel Land's rationale for holding an approximately 45% stake in Keppel REIT?
  4. What is the value of Keppel REIT's property portfolio?

B. Strategic Direction

  1. What is Keppel REIT's investment strategy?
  2. What is Keppel REIT's growth strategy?
  3. Which overseas countries is Keppel REIT targeting to venture into?
  4. Will Keppel REIT consider development projects?

C. Financials

  1. What amounts of distributions has Keppel REIT paid to-date and when were they paid?
  2. How and when will income distribution be made available to Unitholders?
  3. Is the distribution income from Keppel REIT subject to any tax?
  4. What are the fees payable by Keppel REIT?
D. Distribution Reinvestment Plan ("DRP")

  1. What is the DRP?
  2. How does the DRP benefit Unitholders?
  3. Who is eligible for the DRP?
  4. Where can I find the DRP Statement?
  5. What should Unitholders do to participate in the DRP?
  6. How should the Notice of Election be filled up?
  7. What happens if the Notices of Election Forms were incorrectly filled up?
  8. How many new Units are Unitholders entitled to?
  9. How do I trade odd lots?
  10. Where can Unitholders make enquiries on DRP?

  1. What is Keppel REIT?

    Keppel REIT is a commercial real estate investment trust with a sterling portfolio of assets in Singapore and key cities pan-Asia.

    Keppel REIT's objective is to generate stable returns to its Unitholders by owning and investing in a portfolio of high quality real estate and real estate-related assets which are income producing and are predominantly used for commercial purposes.

    Keppel REIT has over $8 billion in assets under management comprising interests in nine premium office assets with 12 office towers strategically located in the central business districts of Singapore, as well as key Australian cities of Sydney, Melbourne, Brisbane and Perth.

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  3. How is Keppel Land related to Keppel REIT ?

    Keppel Land is the sponsor for Keppel REIT.

    Keppel REIT acquired its initial portfolio of four buildings from wholly-owned subsidiaries of Keppel Land for S$630.7 million in 2006. This was satisfied in part by cash of approximately S$190.6 million and the balance of about S$440.1 million by Units in Keppel REIT.

    Keppel Land owns an approximate 45% stake in Keppel REIT.

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  5. What is Keppel Land's rationale for holding an approximately 45% stake in Keppel REIT?

    Keppel Land aligns its interests with Unitholders by retaining a meaningful stake in Keppel REIT. A stake in Keppel REIT also reinforces its commitment to further grow Keppel REIT.

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  7. What is Keppel REIT's investment strategy?

    The Manager invests in quality commercial properties strategically located within the key cities pan-Asia that offer stable income growth and capital appreciation in the mid- to long-term.

    The Manager adheres to stringent criteria in its evaluation of potential assets for acquisition. This involves a thorough review of the exposures, risks and returns as well as the overall value-add of the assets to Keppel REIT's existing portfolio and future growth expectations. The Manager also evaluates the performance of the properties and considers the recycling of capital, where appropriate, to optimise its portfolio.

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  9. What is Keppel REIT's growth strategy?

    Keppel REIT will seek to grow organically by continually enhancing its assets and through selective acquisition of prime commercial properties in Singapore and key cities across pan-Asia. Read more about Keppel REIT's Strategic Direction.

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  11. Which overseas countries is Keppel REIT targeting to venture into?

    Keppel REIT will look to invest in commercial properties in key growth cities in Asia that offer good potential for income growth and asset appreciation in the long-term. Read more about Keppel REIT's Strategic Direction.

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  13. Will Keppel REIT consider development projects?

    Under the current REIT Guidelines by the Monetary Authority of Singapore (MAS), investments by S-REITs in uncompleted property development activities are subject to a limit of 10% of the REIT's total assets.

    On 1 January 2016, new measures were implemented by MAS including the provision for an additional 15% redevelopment limit, subject to certain exceptions. This would enable REITs with ageing assets to rejuvenate their properties, which would boost rental growth in the long-term.

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  15. What amounts of distributions has Keppel REIT paid to-date and when were they paid?

    Keppel REIT will look to invest in commercial properties in key growth cities in Asia that offer good potential for income growth and asset appreciation in the long-term. Read more about Keppel REIT's Strategic Direction.

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  17. How and when will income distribution be made available to Unitholders?

    Keppel REIT distributes at least 90% of its distributable income every quarter in February, May, August and November.

    Keppel REIT's distribution comprises the following types:
    i) Taxable income
    ii) Tax-exempt income
    iii) Capital distribution
    iv) Other gains distribution

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  19. What is the value of Keppel REIT's property portfolio?

    Keppel REIT's portfolio is valued at over $8 billion as at 30 June 2017.

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  21. Is the distribution income from Keppel REIT subject to any tax?

    The Trustee and Manager will deduct income tax at the prevailing corporate tax rate (currently at 17%) from the distributions made to Unitholders that are made out of the taxable income of Keppel REIT. This applies unless, the beneficial owners are individuals or qualifying Unitholders. In such instances, the Trustee and Manager will make the distributions to such Unitholders without deducting any income tax.

    A qualifying Unitholder refers to:

    1. A company incorporated and tax resident in Singapore;
    2. A non-corporate Singapore constituted or registered entity (eg. registered charities, town councils, statutory boards, registered co-operative societies and registered trade unions);
    3. A Singapore branch of a company incorporated outside Singapore;
    4. An international organisation that is exempt from tax on such distributions by reason of an order made under the International Organisations (Immunities and Privileges) Act (Cap. 145).
    5. An agent bank or a Supplementary Retirement Scheme ("SRS") operator who act as nominee for individuals who have purchased Units in the Trust under the Central Provident Fund Investment Scheme or the SRS respectively; or
    6. A nominee who can demonstrate that the Units are held for beneficial owners who are individuals or who fall within the classes of Unitholders listed in (a) to (d) above.

    Distributions made to foreign non-individual Unitholders will be subject to a final withholding tax rate of 10% (until 31 March 2020 unless otherwise stated).

    The above tax ruling does not apply to gains from the sale of real properties. Such gains, if they are considered as trading gains, are assessable to tax on the Trust. Where the gains are capital gains, the Trust will not be assessed to tax and may distribute the capital gains to Unitholders without having to deduct tax at source.

    Any distributions made by the Trust to Unitholders out of tax-exempt income and taxed income would be exempt from Singapore income tax in the hands of all Unitholders, regardless of their corporate or residence status.

    Capital distribution is regarded as "return of capital" in the hands of the Unitholders for Singapore tax purposes and is not subject to Singapore income tax.

    Other gains, where applicable, is not taxable in the hands of all Unitholders.

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  23. What are the fees payable by Keppel REIT?

    These include:

      1. Management fee - Comprises a base fee of 0.5% per annum of the property portfolio value and a performance fee of 3% of the net property income*.
      2. Trustee's fee - A maximum of 0.03% per annum of the property portfolio value.
      3. Acquisition fee - 1% on the acquisition price.
      4. Divestment fee - 0.5% on the sale price.
      5. Property management fee - 3% per annum of the property income.
      6. Leasing commission - (i) one month's gross rent for securing a tenancy of two years or more, (ii) one-half month's gross rent for securing a renewal of tenancy of at least a year but less than two years in proportion to the lease, and (iii) one-quarter month's gross rent for securing a renewal of tenancy of less than a year in proportion to the lease.

  24. *With effect from 1 January 2016, under the Property Funds Index of the CIS code, crystalisation of the annual performance fee has been revised to be no more frequent than once a year. Accordingly, with effect from 1 January 2016, the performance fee will be paid on an annual basis in arrears after the end of the applicable financial year.

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  25. What is the DRP?

    The DRP provides Unitholders the option to receive their distribution in the form of fully-paid new Units instead of cash, or a combination of fully-paid new Units and cash.

    This will enable Unitholders to increase their unitholdings in Keppel REIT without incurring brokerage fees, stamp duties (if any) and other related costs.

    The issue of fully-paid new Units in lieu of cash distributions under the DRP will also strengthen Keppel REIT's balance sheet, enhance its working capital reserve and improve the liquidity of the Units.

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  27. How does the DRP benefit Unitholders?

    Unitholders can enjoy the following benefits from the DRP:

    • Can elect to receive Units in lieu of part or all of the cash amount of distribution
    • Fully-paid new Units are issued at a discount to volume weighted average price
    • No brokerage costs* payable by participating Unitholders
    • No stamp duty* payable by participating Unitholders
    • Units issued will be entitled to future distributions declared

    *Based on the present law of Singapore, and in relation to the Units issued under the DRP.

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  29. Who is eligible for the DRP?

    All Keppel REIT Unitholders are eligible to participate in the DRP, subject to the restrictions on Overseas Unitholders.

    Overseas Unitholders who are Depository Unitholders and wish to participate in the DRP should provide The Central Depository (Pte) Limited, or in the case of Overseas Unitholders who are Non-Depository Unitholders, the Unit Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. (Boardroom), an address in Singapore for the service of notices and documents.

    Please refer to the full text of the DRP Statement containing the terms and conditions of the DRP.

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  31. Where can I find the DRP Statement?

    You may click here to download a copy of the DRP Statement.

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  33. What should Unitholders do to participate in the DRP?

    Eligible Unitholders who wish to participate in the DRP must complete, sign and return the Notices of Election and Tax Declaration Forms (if applicable) to Keppel REIT's Unit Registrar, Boardroom, no later than the date and time indicated on the election form.

    Participating Unitholders may elect to receive his/her distribution as follows:

    • To receive ALL distribution in fully-paid new Units, or
    • To receive a combination of cash and fully-paid new Units.

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  35. How should the Notice of Election be filled up?



    Distributions will be subject to a default tax rate if the Tax Declaration Forms are not returned by 5:00 p.m. on the date specified on the Form.

    Participation by Sub Account Holders of a Depository Agent
    There will only be one Notice of Election Form and Tax Declaration Form for each Depository Agent. Sub Account Holders of a Depository Agent are to liaise with their respective Depository Agents acting as the collating agent for their election of fully-paid new Units and/or cash and tax declaration (if applicable).

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  37. What happens if the Notices of Election Forms were incorrectly filled up?

    The Forms are invalid if:

    • they are incomplete, illegible, not properly completed;
    • there is no original signature on the Notice of Election Form;
    • there is no Common Seal (if applicable) on the Notice of Election Form (in the event Units are held by a Corporation);
    • the Forms are not received by the Unit Registrar by 5:00 p.m. on the date specified on the Forms;
    • Unitholder makes an election of the number of Units which are more than his/her total existing unitholdings as at Books Closure Date; or
    • the true intention of the Unitholder is not ascertainable from the Notice of Election Form.
    The Manager reserves the right to reject a Unitholder's Notice of Election and pay all the distribution entitlement in cash. Default tax rates will apply if the Tax Declaration Form together with the Annexes (if any) are incomplete, illegible, not properly completed or not delivered in accordance with the instructions stated therein.

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  39. How many new Units are Unitholders entitled to?

    The number of fully-paid new Units allotted to each Unitholder under the DRP will be based on the established issue price for the respective DRP exercise. The issue price represents a discount currently set at not more than 10% to the volume-weighted average traded price per Unit for all trades on Singapore Exchange Securities Trading Limited ("SGX-ST") for each of the market days during the assessed period.

    The number of fully-paid new Units to be allotted to eligible Unitholders shall be calculated in accordance with the following formula.



    Where:
    N is the number of fully-paid new Units to be allotted and issued as fully paid to you in respect of such Notice of Election;
    U is the number of participating Units held by you as at the BCD for which such Notice of Election relates;
    D1 is the taxable income component of the Distribution per Unit to which such Notice of Election relates;
    D2 is the tax-exempt income component of the Distribution per Unit to which such Notice of Election relates;
    D3 is the capital component of the Distribution per Unit to which such Notice of Election relates;
    D4 is the other gains component of the Distribution per Unit to which such Notice of Election relates;
    T is the applicable income tax rate; and
    V is the issue price of a new Unit to be allotted and issued as fully paid to you pursuant to the DRP.

    FOR EXAMPLE, if you hold 10,000 Units as at the BCD, the amount of distribution per Unit is 1.68 cents (comprising taxable income distribution, D1 = 1.15 cents, tax-exempt income, D2 = 0.27 cents, capital gains distribution, D3 = 0.10 cents and other gains distribution, D4 = 0.16 cents) and the issue price of each Unit to be issued to you under the DRP is S$0.8695, the number of fully-paid new Units to be issued and allotted to you will be 192 fully-paid new Units calculated as follows:



    In calculating the allotment of fully-paid new Units, it is likely that fractional Units will arise. The fully-paid new Units will be rounded down to the nearest whole Unit. This rounding down approach is applied to each distribution component separately.

    Unitholders can also contact Boardroom for assistance on computing the estimated number of fully-paid new Units that will be allotted. Please refer to (ix) for the contact details.

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  41. How do I trade odd lots?

    A Unitholder who elects to receive fully-paid new Units under the DRP in lieu of the cash amount of the qualifying distribution may receive odd lots of new Units. Unitholders who receive odd lots under the DRP and who wish to trade such odd lots on the SGX-ST should do so on the Unit Share market, which allows trading of odd lots with a minimum of one (1) Unit.

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  43. Where can Unitholders make enquiries on DRP?

    For more information, Unitholders can contact the following:

    Boardroom Corporate & Advisory Services Pte. Ltd.
    Telephone: +65 6536 5355

    Ms Grace Chia
    Assistant General Manager
    Investor Relations & Communications
    T: (65) 6803 1739
    E: grace.chia@kepcapital.com

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Last update: 31 March 2016