Keppel Corp (SGX: BN4) up 3.5% on real estate buy – Really, real estate, now? – Dhaka Tribune

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Keppel Corp (SGX: BN4) shares are up 3.5% today as the company announces the acquisition of Aermont Capital. This could, of course, be a lovely deal. But we have our doubts about the European real estate market just at present. Partly this is simply the turn of the interest rate cycle but also there’s that pesky problem of a deep structural change happening. We tend to think – tend – that the entire sector is one to stay well away from. In fact, we’re very strongly of the opinion that anyone entering the market right now is trying to catch a falling knife.

But here’s the deal all the same: “Singapore’s Keppel Corporation KPLM.SI on Wednesday said its unit Keppel Capital Holdings will acquire all issued voting shares in European asset manager Aermont Capital in two tranches, for a maximum sum of S$1.35 billion ($1.01 billion). Keppel Capital will buy 50% stake in Aermont for a maximum amount of 356.9 million euros ($391.6 million) in the first half of 2024, and the remaining stake for 575 million euros in the first half of 2028, Keppel said.”

Buy/sell, rent/lease residential &
commercials real estate properties.

Aermont is an asset manager, yes, but more pointedly: “Established in 2007, Aermont is an independent asset management business focused on real estate and real estate-related investment activities in Europe. Keppel said Aermont’s investments had included assets and businesses in the office, student accommodation, workforce housing, luxury hospitality and production studio infrastructure sectors, among others.”


Keppel Corp share price from Google Finance

We’ve talked before about Keppel: There have been recent successes: “Keppel Corporation’s flagship open-ended infrastructure fund, Keppel Core Infrastructure Fund (KCIF), achieved its first close with initial capital and co-investment commitments of US$575 million (S$786.4 million).” If you’re running a fund manager then gaining funds to manage is a success. But the other business lines look less appealing. Property and China doesn’t look, shall we say politely, interesting just at present. Or perhaps too interesting in fact.”

Our problem here is that we do think European property is dire and getting worse as an investment market. There’s the rise in interest rates, which is depressing asset values everywhere. But there’s also that combination of online shopping killing retail values and work from home killing office valuations. We’re simply not keen on the sector which makes us a little side-eyed at a $billion’s worth of investment into a real estate asset manager.

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