Boustead Singapore Announces Major Divestment and Proposed Listing of UI Boustead REIT on SGX-ST

Boustead Singapore Limited Announces Major Divestment, REIT IPO, and Strategic Reshaping of Real Estate Portfolio

Key Points of the Announcement

Major Divestment of Singapore Properties: Boustead Singapore Limited (BSL) has entered into agreements to divest its interests in 15 Singapore properties, following the earlier divestment of four properties. This is part of the planned listing of UI Boustead REIT on the SGX Mainboard.
Eligibility-to-List Letter Received: SGX-ST has issued its eligibility-to-list letter for UI Boustead REIT, clearing an important regulatory hurdle for the IPO.
IPO and Listing Details: The terms of the initial public offering (IPO) are still being finalised, and the listing remains subject to regulatory approvals (including tax rulings) and market conditions.
Extraordinary General Meeting: BSL shareholders will vote on the Proposed BPL Transactions (divestments, bond-related transactions, subscription for REIT units, and contributions to IPO expenses) at an EGM scheduled for 25 February 2026.
Valuation and Financial Impact: The agreed property value for the 23 properties in the initial REIT portfolio is S\$1,904.2 million (100% basis), with the transaction price payable by UI Boustead REIT estimated at S\$1,122.4 million. BSL’s estimated divestment proceeds are S\$258.7 million, resulting in a significant gain relative to book value.
Strategic Rationale: The divestment and reinvestment into UI Boustead REIT aim to unlock value, consolidate holdings into a single liquid and tax-efficient vehicle, diversify recurring income into growth markets (including Japan), and provide capital for further expansion.
Pro Forma Financial Effects: The transactions are expected to increase NTA per share from 117.7 to 149.2 cents and EPS from 19.6 to 48.2 cents, reflecting substantial value creation.
Major Transaction Classification: The size of the divestment, relative to BSL’s market capitalisation and net profits, means shareholder approval is required under SGX rules.

Details of the Divestment and REIT Listing

Properties Divested

BSL (through Boustead Projects Limited, or BPL) will divest its interests in 15 Singapore properties, including but not limited to Edward Boustead Centre, GSK Asia House, AUMOVIO Building, 351 Braddell Road, and several properties in Changi North Way, Seletar Aerospace Heights, and Tuas South Avenue. These divestments, along with four previously announced properties, form part of the REIT’s initial portfolio.

The divested interests are complex, involving partial interests in joint ventures and partnerships, such as a 25% stake in Boustead Industrial Fund (BIF) (which owns 12 properties), a 4.8% interest in Razer SEA HQ, a 63.25% effective interest in Rolls-Royce Solutions Asia, and a 100% stake in 31 Tuas South Avenue 10.

Transaction Structure

Sale & Purchase Agreements: Multiple agreements have been signed, including unit purchase agreements for BIF units, share purchase agreements for stakes in joint ventures, and put/call option agreements for asset transfers.
Bond-Related Transactions: UI Boustead REIT will subscribe for bonds issued by LLPs (BP-AMC LLP, BP-TPM LLP, Snakepit-BP LLP), with proceeds used to repay loans to BPL and provide upfront cash distributions.
Right of First Refusal: BPL will grant UI Boustead REIT a right of first refusal over its stabilised income-producing logistics and industrial assets in Asia Pacific, supporting future growth.
IPO Expense Contributions: UIB (the sponsor) and BPL will jointly contribute S\$20 million to cover IPO expenses, with BPL’s share amounting to S\$5.6 million.
BPL Units Subscription: BPL will subscribe for approximately 16.9% of UI Boustead REIT units on the listing date, using S\$202.8 million of the divestment proceeds.

Valuation and Financial Impact

Agreed Property Value: The initial portfolio (21 Singapore properties, 2 Japan properties) is valued at S\$1,904.2 million (100% basis). BSL’s share in the Singapore properties is valued at S\$493.4 million.
Estimated Divestment Consideration: BSL will receive S\$218.7 million in divestment consideration and S\$40 million from bond-related transactions, totalling S\$258.7 million (net of S\$234.7 million in bank borrowings).
Gain on Divestment: The divestment represents an excess of ~S\$166.8 million over book value as at March 2025, with an estimated gain of S\$154.6 million after fees and contributions.
Pro Forma NTA and EPS: NTA rises from S\$578.8 million to S\$733.4 million, and EPS jumps from 19.6 cents to 48.2 cents, highlighting substantial value unlocking.

Use of Proceeds

BPL Units Subscription: S\$202.8 million
Transaction Costs: S\$8.0 million
BPL Contribution to IPO Expenses: S\$5.6 million
Remainder: To be deployed as working capital, supporting further growth opportunities and capital allocation flexibility.

Strategic Rationale and Benefits

Monetisation and Value Unlocking: The divestment allows BSL to realise market value for its real estate, unlocking significant gains.
Consolidation in a Liquid, Tax-Efficient Vehicle: Consolidating holdings in UI Boustead REIT provides liquidity, tax benefits, and professional management under UIB.
Geographic Diversification: BSL gains exposure to Japan and potentially other growth markets via the REIT portfolio.
Capital for Expansion: The proceeds allow BSL to pursue new capital allocation and investment opportunities across its business lines.

Shareholder Implications and Price-Sensitive Information

Major Transaction Requires Shareholder Approval: The size of the transaction exceeds SGX thresholds (relative figures for proceeds, NAV, and net profits exceed 20%), so approval at the EGM is mandatory.
Potential Share Price Impact: The substantial gain on divestment, improved financial metrics (NTA, EPS), and strategic repositioning could positively affect BSL’s share value, but completion depends on successful IPO and market/regulatory conditions.
Directors’ and Substantial Shareholders’ Interests: Mr Wong Fong Fui (Chairman & CEO) holds ~44.48% of shares; Abigail P. Johnson (FMR LLC) holds ~7.89%. Some directors will take board positions in the REIT Manager, aligning interests.
Risks and Uncertainties: Completion is contingent on regulatory approvals, market conditions, and successful IPO. Shareholders are cautioned that there is no certainty the transactions will proceed as planned.

Other Important Information

Inspection of Documents: Key transaction documents, valuation reports, financial statements, and agreements are available for inspection at BSL’s registered office.
Next Steps: Shareholders will receive a circular and notice for the EGM. The Company will announce further material developments as required.

About Boustead Singapore Limited

Established in 1828, Boustead Singapore Limited (SGX:F9D) is Singapore’s oldest continuous business organisation, focusing on infrastructure-related engineering, real estate solutions, geospatial technology, and healthcare. It has a global presence in 95 countries and has received numerous awards for transparency, sustainability, and corporate excellence.

Contact Information

For investor and media enquiries:
Mr Dominic Seow, Senior Manager, Corporate Marketing & Investor Relations
T +65 6747 0016 | D +65 6709 8111 | E [email protected]

Disclaimer

This article is for informational purposes only and does not constitute investment advice, an offer, or solicitation to purchase securities. The proposed IPO and listing of UI Boustead REIT are subject to regulatory approvals, market conditions, and shareholder approval. Investors should consult professional advisers and review the final prospectus before making any investment decisions. No reliance should be placed on any information other than that contained in the official prospectus and company announcements.