Boustead Singapore has officially unveiled its proposed real estate investment trust (REIT), UI Boustead REIT, marking a pivotal moment in its capital recycling strategy. With a robust initial portfolio valued at approximately S$1.9 billion, this IPO positions Boustead to unlock liquidity from its industrial assets while offering investors exposure to high-specification logistics and business space properties across Asia Pacific.
UI Boustead REIT’s initial portfolio comprises 23 properties with 21 leasehold assets in Singapore and two freehold properties in Japan. These assets span a total gross floor area of 5.9 million square feet, with a net lettable area of 5.3 million square feet. The Singapore properties represent 69.6% of the portfolio value, underscoring Boustead’s deep footprint in the local industrial landscape. The Japan assets, contributing 30.4%, signal the REIT’s regional ambitions and diversification strategy.
The REIT will invest directly or indirectly in logistics, industrial, high-specification industrial, and business space assets. Its investment mandate prioritizes stable, income-generating properties in Singapore and Japan, with potential expansion across Asia Pacific.
Strategic Divestments and Capital Recycling
As part of the IPO, Boustead Projects has divested stakes in four Singapore properties. The properties are 29 Media Circle, 84 Boon Keng Road, 11 Seletar Aerospace Link, and 8 and 12 Seletar Aerospace Heights. These divestments are structured through put and call option agreements and share purchase agreements, ensuring UI Boustead REIT acquires full economic interest in the assets.
Boustead is expected to receive S$62.1 million in cash proceeds, with net proceeds of S$57.8 million earmarked for acquisitions, working capital, and reinvestment. The company anticipates a gain on disposal of approximately S$52.6 million, which could boost its FY25 earnings per share by 49% on a pro forma basis.
Sponsorship and Governance
UI Boustead REIT will be sponsored by UIB Holdings, in which Boustead holds a 20% stake. UIB Reit Management, a wholly owned subsidiary of UIB, will serve as the REIT manager, while Perpetual (Asia) will act as trustee. Boustead is expected to retain up to 16.9% of the IPO units post-listing, maintaining a strategic interest in the REIT’s performance.
Importantly, Boustead’s right of first refusal (ROFR) to Boustead Industrial Fund (BIF) remains intact post-listing. This opens the door for future asset injections into the REIT, providing a pipeline for inorganic growth. UIB Holdings will also grant a ROFR to the REIT over stabilised assets in its portfolio that align with the REIT’s mandate.
Market Implications and Investor Outlook
OCBC Investment Research views the spin-off positively, citing Boustead’s opportunity to monetise mature assets and gain exposure to a liquid, tax-efficient investment vehicle. The REIT structure offers recurring income and enhances Boustead’s capital flexibility across its business units.
For investors, UI Boustead REIT presents a compelling proposition: a diversified portfolio anchored in Singapore’s resilient industrial sector, complemented by strategic exposure to Japan. With potential acquisitions already in the pipeline, including properties at 98 Tuas Bay Drive and 6 Tampines Industrial Avenue 5, the REIT is poised for expansion.
Final Thoughts
UI Boustead REIT’s IPO is more than a financial manoeuvre. It is a strategic recalibration of Boustead’s real estate ambitions. By unlocking asset value and creating a scalable investment platform, Boustead is positioning itself for long-term growth while offering investors a gateway into Asia’s industrial property market.
As the listing date approaches, market watchers will be keen to assess final valuations, unit pricing, and yield projections. But one thing is clear: Boustead’s REIT debut is set to reshape its capital structure and deepen its footprint in the region’s industrial real estate ecosystem.