Keppel REIT share price so bad its good?

Did Keppel REIT bite off more than it can chew? After charging to a 3-year high of $1.10 on 28 November 2025, Keppel REIT share price fell off the cliff following its additional one-third stake of Marina Bay Financial Center (MBFC) Tower 3 from Hong Kong Land for a whopping $1.45 billion. To support the acquisition, Keppel REIT has launched a mega Equity Fund Raising (EFR) of $886.3 million.

Obviously, no S-Reit unitholders like EFR. In this context, it’s understandable that unitholders of Keppel REIT are boiling over the mega $886.3 million EFR. Imagine having 923 million of new units flooding the market. It will be a miracle if Keppel REIT share price does not dive on 19 January 2026, the day of the listing of the new units. To make matters worse, this mega EFR came right after the $113 million Private Placement in October 2025.

The new units are issued on the basis of 23 new units for every 100 existing units at an issue price of $0.96. Currently, Keppel REIT share price is being traded at $0.97. Following the listing of the new units, there may be a possibility of Keppel REIT share price falling below $0.90 due to short-term negative sentiments.

Generally speaking, investors do not like acquisitions that cause dilution to both unit price and distribution per unit (DPU). Most acquisitions made by S-REITs are DPU accretive. This was the case for Keppel REIT’s Top Ryde City Shopping Centre in Sydney. During the launch of the Private Placement, Keppel REIT stated clearly that that acquisition will be DPU accretive. However, for the latest acquisition, the Manager shared that the pro forma DPU will drop to 4.42 cents from 4.72 cents (excluding anniversary dividend). Net asset value (NAV) will also drop to $1.18 from $1.24.

But what makes this transaction inexplicable to many unitholders is that the Manager is charging Management fee for acquiring an additional one-third interest in MBFC Tower 3. My initial thought is that Keppel REIT already owned one-third interest in MBFC Tower 3 in the first place, so it could have waived off the Management fee as a goodwill gesture to existing unitholders. My opinion is that this transaction should not be viewed as an outright “acquisition” of a new asset.

Nevertheless, the Manager assured that the Management fees will be entirely in units so as to optimise capital value and the operational performance of Keppel REIT.

Against the backdrop of falling SORA (Singapore Overnight Rate Average) interest rates, Keppel REIT wasted no time in jumping on the bandwagon of acquiring assets to drive growth. In this article, I will share my insights on the outlook of Keppel REIT share price in 2026.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Keppel REIT before. Whether Keppel REIT share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

Keppel REIT share price faces litmus test

First thing first: I have empathy for existing unitholders of Keppel REIT. Following the ravage of pandemic, Keppel REIT share price struggled to restore to its pre-pandemic levels of $1.10 – $1.20. In October 2023, the counter even fell to a low of $0.80, causing many unitholders to lose confidence in the stock. As such, you can imagine the giddiness of unitholders as Keppel REIT turned bullish in 2025 to hit a high of $1.10.

Turnaround stories of SGX stocks are rare. Thus, unitholders must be gutted by the latest acquisition, which is likely to cause Keppel REIT share price to turn bearish again. I suspect some unitholders may not have the patience to wait out the latest winter and may take this opportunity to bolt for the exit. This is especially so given that the DPU will be diluted.

Keppel REIT explained that it could not [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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