Boustead’s proposed Reit listing has portfolio value of S$1.9 billion

[SINGAPORE] Boustead Singapore said on Thursday (Sep 18) that its proposed real estate investment trust listing – UI Boustead Reit – is estimated to have a portfolio value of about S$1.9 billion.

The portfolio will contain 23 logistics and industrial properties – 21 in Singapore that are leasehold and two freehold properties in Japan, the company said in a bourse filing.

UI Boustead Reit will use this valuation to decide how much it is willing to pay to acquire these assets. Some of the properties will be bought indirectly by acquiring other Reits that already hold these properties, while the rest will be bought directly.

While UI Boustead Reit will hold about 49 per cent interest in three of these Reits, it said it is expected to receive 100 per cent economic interests from three Singapore properties owned by these entities.

This is because the deal is structured through partnership interests and investment in the bonds to be issued by the three Reits.

Close to 70 per cent of the portfolio’s property value will be from its Singapore properties. Boustead Singapore’s stake in these 21 properties is worth about 24.7 per cent of the portfolio.

The two Japan properties make up the rest of the 30.4 per cent of the UI Boustead Reit portfolio. Boustead Singapore does not hold any interests in these properties through its subsidiaries.

The total gross floor area across all 23 properties is about 5.9 million square feet (sq ft), with a net lettable area of some 5.3 million sq ft.

While UI Boustead Reit’s investment strategy includes investments in the Asia-Pacific region, its initial focus will be on Singapore and Japan, read the filing.

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Details of its proposed Reit listing comes about two weeks after the engineering and technology group said it applied for the listing on behalf of UIB Holdings, the proposed sponsor of the Reit. Boustead Singapore holds a 20 per cent interest in UIB through Boustead Projects.

UIB Reit Management, a wholly owned subsidiary of UIB, will be the manager of UI Boustead Reit, while Perpetual (Asia) will be its trustee.

Divestments made ahead of proposed listing

As part of this proposed listing, Boustead Singapore has divested its stake in four Singapore properties through Boustead Projects to UI Boustead Reit on Thursday.

Boustead Projects divested 51 per cent of its interest in a property located at 29 Media Circle. It also sold a similar share in a property located at 8 and 12 Seletar Aerospace Heights.

It also divested a 62.25 per cent of its stake in a property at 84 Boon Keng Road, as well as a 37.75 per cent interest in a fourth property at 11 Seletar Aerospace Link.

In addition to acquiring Boustead Projects’ interests in these four properties, UI Boustead Reit will also purchase all of their remaining stakes held by other entities, so that the Reit will be holding the entire stake of these properties.

Besides these four Singapore properties, the proposed listing of UI Boustead Reit potentially involves five other transactions.

It has entered into an agreement with BP-TPM LLP – a joint venture that is 51 per cent owned by Boustead Projects – to buy properties at 98 Tuas Bay Drive and 6 Tampines Industrial Avenue 5.

The Reit is also looking to buy two general industrial properties in Singapore from Boustead Projects, a portfolio of 12 properties from Boustead Industrial Fund, as well as a business space located at 1 One-North Crescent from Snakepit-BP LLP, also another joint venture firm by Boustead Projects.

As for the Japan assets, UI Boustead Reit may acquire and hold the trust beneficial interests of the two properties through common investment structures in the country.

Boustead Singapore had requested for a trading halt earlier Thursday morning before market open, but asked for it to be lifted after this announcement. Shares of the company fell S$0.04 or 1 per cent to close at S$1.76 on Wednesday.