The Inland Revenue Authority of Singapore (IRAS) has given Keppel Land a positive advance tax ruling, which will allow the developer to realise $394 million net gains from the proposed divestment of Phase One of Marina Bay Financial Centre (MBFC). The amount is higher compared to the $321 million net gains it originally expected.
“The company wishes to inform shareholders that a positive advance tax ruling has been received from IRAS confirming that the gains from the proposed divestment of the MBFC 1 Interest is capital in nature and hence not subject to tax,” said Keppel Land in a recent release to the Singapore Exchange.
It was announced in October that Keppel Land and its unit K-Reit Asia have entered into an asset swap, wherein Keppel Land will sell its one-third stake in MBFC Phase One to K-Reit for $1.427 billion.
MBFC Phase One consists of two fully leased Grade A office towers with a total net lettable area (NLA) of around 1.65 million sq ft, as well as the Marina Bay Link Mall, which has a retail NLA of around 94,500 sq ft. Among the major tenants at MBFC Towers 1 & 2 include American Express, Barclays Capital, Nomura and Standard Chartered Bank.
As part of the agreement, K-REIT is selling Keppel Towers and the nearby GE Tower located in Tanjong Pagar to Keppel Land for $573 million.
Keppel Land said in October that it will convert GE Tower and Keppel Towers into a freehold residential project.