OCBC Investment Research
Date of Report: 19 September 2025
Boustead Singapore Poised for Growth: REIT Spin-Off, Robust Financials, and ESG Leadership

Executive Summary: Boustead Singapore’s Strategic Leap Forward

Boustead Singapore Limited, a stalwart in Singapore’s industrial and technology landscape since 1828, is making headlines with its proposed spin-off of real estate assets into a new REIT, UI Boustead REIT (UIBREIT). This transformation unlocks significant shareholder value and positions Boustead to ride powerful secular trends, including sustainability, smart cities, and healthcare innovation. The company’s healthy balance sheet, strong net cash position, and deep engineering expertise further augment its prospects for accretive growth and capital recycling.

Key Investment Thesis: Why Boustead Shines

Boustead’s diversified operations span energy engineering, real estate, geospatial technology, and healthcare. The company’s exposure to long-term growth drivers such as climate action, urban digitalization, and aging populations provides a resilient platform for expansion. With a solid cash position and a history of prudent capital deployment, Boustead is ideally placed to pursue further investments and acquisitions, delivering value to shareholders.

UI Boustead REIT IPO: Unlocking Value and Steady Income

• Boustead will divest interests in four Singapore properties to UIBREIT, unlocking a disposal gain of approximately SGD52.6 million.
• The spin-off enables Boustead to recycle capital and maintain up to a 16.9% stake in UIBREIT post-listing, ensuring a steady income stream.
• UIBREIT’s initial IPO portfolio will feature 23 properties across Singapore and Japan, with a total agreed property value of SGD1.9 billion. Boustead’s involvement as a major stakeholder in UIB Holdings Limited (20% interest) further strengthens its position.
• Upon completion, Boustead expects to receive SGD62.1 million in cash, with net proceeds of SGD57.8 million after transaction costs, which may be deployed for acquisitions, working capital, or further reinvestment into UIBREIT.
• On a pro forma basis, FY25 EPS would have been 49% higher at 29.2 Singapore cents if the divestments had been completed at the start of the financial year.

Strategic Real Estate Moves: Monetization, Recycling, and Future Growth

• Boustead is divesting interests in four key properties:
  • 51% of 29 Media Circle
  • 51% of 8 and 12 Seletar Aerospace Heights
  • 62.25% effective interest in 84 Boon Keng Road
  • 37.75% effective interest in 11 Seletar Aerospace Link
• UIBREIT will also seek to acquire all units in Boustead Industrial Fund (BIF), including Boustead’s 25% stake, subject to investor agreement.
• Boustead’s right of first refusal (ROFR) for asset sales to BIF will remain post-listing, suggesting ongoing opportunities for asset monetization and growth for UIBREIT.

Financial Performance and Forecasts: Strong Operating Results

• Revenue growth: -31.3% (FY25), 11.3% (FY26E), 10.2% (FY27E)
• Gross profit margin: 44.3% (FY25), 31.4% (FY26E), 31.0% (FY27E)
• Net income margin: 19.0% (FY25), 14.4% (FY26E, FY27E)
• EPS growth: 45.6% (FY25), -15.4% (FY26E), 10.3% (FY27E)
• Dividend yield: 4.3% (FY25), 3.8% (FY26E), 4.1% (FY27E)

Sum-of-the-Parts (SOTP) Valuation Breakdown

ESG Leadership: Boustead’s Commitment to Sustainability and Governance

• Environmental Stewardship: Boustead acts as an ESG enabler, providing eco-sustainable solutions, such as heat recovery systems that double gas turbine efficiency and reduce plant energy demand. Boustead Projects holds ISO 14001:2015 certification for Environmental Management Systems.
• Social Responsibility: Boustead is committed to workplace health, safety, and career development—but has room to improve gender diversity and accident rates. The company has donated over SGD4 million to educational and cultural institutions over 15 years.
• Governance: Boustead upholds a robust Code of Conduct, covering anti-bribery, anti-corruption, fair dealing, privacy, insider trading, and whistleblowing. A data protection committee and whistleblowing mechanism ensure transparency and accountability.

Potential Catalysts and Investment Risks

Catalysts:

• Strong contract/order win momentum
• Accretive acquisitions, especially in Healthcare
• Spin-off of real estate assets into a REIT

Risks:

• Cost overruns pressuring profit margins
• Widening losses from the Healthcare Division
• Macroeconomic weakness affecting fiscal and corporate spending

Peer Comparison: Valuations and Financial Ratios

Boustead Singapore: Company Overview

• Founded in 1828, Boustead is a progressive infrastructure-related engineering and technology group listed on the SGX Mainboard.
• Four divisions:
  • Energy Engineering: Critical process technologies and emissions reduction for oil & gas, petrochemical, and energy sectors
  • Real Estate: Eco-sustainable, innovative developments via Boustead Projects
  • Geospatial: Exclusive distributor of Esri ArcGIS technology in Asia Pacific
  • Healthcare: Solutions for age-related diseases and mobility, focused on rehabilitative care and sports science
• Global footprint: Projects in 93 countries and territories

Historical Financials: Income Statement and Key Ratios

Conclusion: Boustead’s Path Ahead

Boustead Singapore stands well-positioned for sustainable growth, leveraging its REIT spin-off, deep sector expertise, and strong financials. The strategic monetization of real estate assets, commitment to ESG principles, and robust cash flow generation create a solid foundation for future expansion, acquisitions, and shareholder returns. Investors should monitor upcoming catalysts, including order book progress, acquisition activity, and Boustead’s 1HFY26 results, as the company continues its journey as a key player in Singapore’s industrial and technology sectors.