Rodamco Asia and Keppel Land agree to sell Capital Square

The deal, if and when completed, will reduce the share of minority interests in portfolio to 30%

Rodamco Asia N.V. announced today that it has entered a conditional agreement to sell its 30% interest in the shares of Capital Square Pte Ltd, the company that owns Capital Square, a prime office building in Singapore, to Queensley Holdings Limited, a special vehicle sponsored by ERGO Versicherungsgruppe AG, which will also purchase the 70% of the shares owned by Keppel Land Limited.

The transaction is expected to complete in the first half of December.

In this share transaction, the building is valued at SGD 490 million (SGD 1,300 per square foot based on total lease-able area), which is 10% lower than the book value as at 28 February 2002. This was already reflected in the semi-annual results that were published on 18 October 2002. The net proceeds of the sale of the 30% of the shares that Rodamco Asia owns will be approximately EUR 20 million. This transaction, if completed, will have a negative impact of about EUR 0.7 million on Rodamco AsiaÂ's net profit for the financial year 2002/2003.

After this divestment, Rodamco Asia will hold minority interests in seven of the 15 properties in its portfolio, amounting to 30% of the total portfolio value. This is down from 46.9% at the end of the last financial year, and from as high as 96.5% at the end of the financial year 1999/2000.

Ton de Boer, Chief Executive Officer of Rodamco Asia said, 'This sale is another important step in our strategy to move towards majority stakes and to focus more on the northern part of Asia. While Capital Square has always enjoyed nearly full occupancy and remains attractive to financial sector-related institutions because of its high quality and large floor plates, the prime office market in Singapore has been under some pressure over the past few years. Going forward, it could face more uncertainty in view of the fact that recently plans have been announced to release new land that would create an additional business district.'

Keppel Land Ltd. Friday said it has agreed to sell its 70% stake in Capital Square, a downtown office building, for a loss of S$72 million (US$1=S$1.7684).

Priced at S$85 million, the joint sale of Capital Square will result in a loss for Keppel Land after taking into account transaction and other costs.

(source: Rodamco Asia and Keppel Land)

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