Boustead gets SGX nod for REIT listing, eyes $154.6 million gain from divestments
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Boustead’s divestments involve selling its interests in various industrial assets to the REIT.
PHOTO: BOUSTEAD SINGAPORE
SINGAPORE – Boustead Singapore on Feb 10 announced that it has received the eligibility-to-list letter from the Singapore Exchange for the proposed listing of UI Boustead REIT, moving the group closer to spinning off its industrial real estate assets.
The mainboard-listed infrastructure and engineering group also announced it has entered into definitive agreements to divest its interests in the remaining Singapore properties to the new real estate investment trust (REIT).
The proposed divestment is expected to unlock significant value for the group, with Boustead estimating the gain to be approximately $154.6 million.
In January, Bloomberg reported that UI Boustead REIT was setting up to list in Singapore as early as March, with targeted proceeds of at least $900 million.
The initial portfolio of UI Boustead REIT will comprise 23 properties with an agreed property value of about $1.9 billion. This includes 21 leasehold properties located in Singapore and two freehold properties located in Japan.
Boustead’s specific divestment involves selling its interests in 15 of these industrial assets, including the Edward Boustead Centre, GSK Asia House and the Razer South-east Asia headquarters, to the REIT. From the transaction, the group expects to receive total proceeds of approximately $258.7 million. This sum comprises the divestment consideration and proceeds from bond-related transactions.
In September 2025, the company announced the divestment of four other properties.
Boustead intends to remain a key stakeholder in the new entity. The company plans to utilise approximately $202.8 million of the proceeds to subscribe for a 16.9 per cent stake in the REIT. This subscription will be funded directly from the divestment consideration.
Rationale and impact
The group stated that the transaction allows it to monetise its real estate holdings at market valuation while consolidating its stabilised industrial assets into a “single liquid and tax-efficient investment vehicle”.
Furthermore, the listing provides Boustead with a platform for geographic diversification. Through the REIT, the group is set to gain strategic access to the Japanese market and other potential growth markets beyond Singapore.
On a pro forma basis, assuming the transaction had been completed on March 31, 2025, the group’s net tangible assets per share would have increased to $1.492, up from $1.177. Earnings per share for financial year 2025 would have jumped to 48.2 cents, up from 19.6 cents, driven largely by the one-off value unlocking gain.
The deal remains subject to shareholder approval. Boustead will convene an extraordinary general meeting on Feb 25 to seek approval for the transaction.
UI Boustead REIT is sponsored by UIB Holdings, an associated company of Boustead Singapore. To demonstrate their support for the initial public offering (IPO), the sponsor and Boustead have committed to bearing $20 million of the IPO expenses.
Metro joint-venture divestment
Separately, Metro Holdings announced on Feb 10 that its wholly owned subsidiary, Metrobilt Construction, has entered into agreements to divest its 26 per cent stake in the Boustead Industrial Fund (BIF) to the new REIT. Metro has been a joint-venture partner in BIF since 2020.
Unlike Boustead, the property and retail group is making a complete exit and will not subscribe for units in the new entity. Metro expects to receive net proceeds of approximately $116 million from the transaction.
This sum comprises cash from the sale of units, the distribution of divestment proceeds, and the full redemption of the 7 per cent notes currently held by the group.
Metro Group chief executive Yip Hoong Mun noted that the divestment allows the group to “realise stable and recurring income” generated since 2020, while enabling it to “recycle capital into strategic opportunities”.
The group does not expect the transaction to have a significant impact on its earnings or net tangible assets per share for the financial year ending March 2026.
Boustead shares closed two cents, or 0.9 per cent, higher at $2.20 on Feb 10. THE BUSINESS TIMES
