Keppel achieves first closing for flagship Keppel Sustainable Urban Renewal Fund

Total FUM for Keppel’s Sustainable Urban Renewal strategy grows to over US$1.7b

Global asset manager and operator Keppel Ltd. is pleased to announce the first close for its flagship Keppel Sustainable Urban Renewal Fund^[1] (KSURF) with the securing of Korean institutional capital. This brings the total Funds under Management^[2] (FUM) in Keppel’s Sustainable Urban Renewal (SUR) strategy to over US$1.7 billion (about S$2.3 billion)^[3].

KSURF will invest in value-add real estate and platform opportunities to create a new generation of high-quality, sustainable assets across real estate segments^[4] including commercial, living, life sciences, hospitality and logistics in Singapore, South Korea, Japan, Australia and first-tier cities in China.

Ms Christina Tan, CEO of Fund Management and Chief Investment Officer, Keppel Ltd., said, “Keppel’s SUR strategy is a unique series of fund products designed to address the urgent call to decarbonise the world’s built environment, with the aim of achieving both strong sustainability outcomes and good investment returns.

“We are pleased that our SUR strategy has received strong backing from institutional investors. The achievement of over US$1.7b in total FUM for our SUR strategy underscores the confidence that our investors have in Keppel’s ability to deliver good risk-adjusted returns and differentiated value-add through our deep operating capabilities. We will continue to build on the trust placed in Keppel as we strive to drive robust performance for our investors.”

Mr Louis Lim, CEO, Real Estate, Keppel Ltd., said, “Keppel’s SUR strategy offers a series of innovative asset enhancement and sustainability solutioning, such as renewable energy, energy and water saving solutions, as well as smart building controls, which aims to provide up to 50% energy savings, to create high quality, healthier and more sustainable buildings. We look forward to contributing our expertise to our private funds to improve the operational efficiency and performance of the assets to meet evolving tenant demands.”

Keppel is presently implementing its SUR capabilities in several projects in markets including Singapore, Australia, China, India, Japan, South Korea and Vietnam. Its unique approach to SUR integrates people, AI-driven technology and processes to bolster the efficiency, sustainability performance and valuation of real estate assets. Through its SUR capabilities, Keppel aims to create greener urban solutions by rejuvenating older buildings with green technology, and incorporating green design features when redeveloping existing buildings that require a major overhaul or rebuild.

Buildings are estimated to account for about 40% of global carbon emissions, with the bulk of a building’s carbon emissions arising from its operations^[5]. While the retrofitting rate will need to exceed 3% per year to meet international net zero pledges by 2050^[6], most mature cities are seeing retrofitting rates of only 1 to 2% per year^[7]. There is thus a large addressable market of existing buildings to decarbonise, presenting compelling opportunities for Keppel’s Sustainable Urban Renewal strategy.

The abovementioned first close of KSURF is not expected to have any material impact on the earnings per share and net tangible assets per share of Keppel Ltd. for the financial year ending 31 December 2024.

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About Keppel

Keppel Ltd. (SGX:BN4) is a global asset manager and operator with strong expertise in sustainability-related solutions spanning the areas of infrastructure, real estate and connectivity. Headquartered in Singapore, Keppel operates in more than 20 countries worldwide, providing critical infrastructure and services for renewables, clean energy, decarbonisation, sustainable urban renewal and digital connectivity. Keppel creates value for investors and stakeholders through its quality investment platforms and diverse asset portfolios, including private funds and listed real estate and business trusts.

^[1] Including co-investment vehicles.

^[2] Gross asset value of investments and uninvested capital commitments on a leveraged basis to project fully invested FUM.

^[3] The FUM of US$1.7 billion includes the first closing for KSURF, the China-focused SUR programme and its capital top-ups, co-investment capital, as well as Keppel’s sponsor stakes in these vehicles.

^[4] Excluding the education, student accommodation and data centre sectors where Keppel has separate fund products.

^[5] World Green Building Council, https://worldgbc.org/advancing-net-zero/embodied-carbon/.

^[6] JLL, Decarbonising Cities and Real Estate, May 2022.

^[7] World Economic Forum, A Framework for the Future of Real Estate, Apr 2021.