Metro Holdings Unlocks Value: Divestment of 26% Stake in Boustead Industrial Fund

Key Highlights for Investors

• Major Divestment: Metro Holdings Limited has announced the divestment of its 26% interest in the Boustead Industrial Fund (BIF), a significant portfolio of industrial and logistics assets in Singapore.
• Transaction Value: The agreed property value relating to the 15 properties under BIF is approximately S\$765.7 million.
• Net Proceeds: Metro expects to receive net sale proceeds of about S\$116.0 million after deducting legal and professional fees and expenses.
• Portfolio Details: BIF owns 15 industrial, business park, high-spec industrial, and logistics properties across Singapore, with a net lettable area of about 2.2 million square feet.
• Unit Purchase Agreement (UPA): Metrobilt Construction Pte Ltd, Metro’s wholly-owned subsidiary, has entered into a UPA with UI Boustead REIT for the sale of its interest in 12 properties. The remaining 25% held by BP-Real Estate Investments Pte Ltd (subsidiary of Boustead Projects Limited) and 49% by AP SG 21 Pte Ltd will also be sold to UIB REIT.
• Distribution of Proceeds: For 3 properties held through BIF’s 49% equity interests, put and call option agreements (PCOAs) have been signed. On completion, net proceeds from these will be distributed to Metro proportionate to its 26% unitholding.
• Redemption of Notes: Metro will also receive cash from the redemption of its 26% holding in the 7.0% Notes issued by Perpetual (Asia) Limited, trustee of BIF.
• Strategic Capital Recycling: The divestment enables Metro to unlock value and recycle capital into new strategic opportunities, potentially increasing its flexibility for future growth.
• Management Commentary: Mr. Yip Hoong Mun, Group CEO & Executive Director, stated that the investment has provided stable and recurring income since 2020 and the divestment supports Metro’s broader strategic goals.

Potential Price Sensitivity & Shareholder Information

• Significant Cash Inflow: The estimated S\$116.0 million net proceeds represent a material cash injection, which could be deployed for future investments or returned to shareholders.
• Portfolio Realignment: Selling a major industrial asset base in Singapore may affect Metro’s earnings profile and asset mix, potentially impacting investor perception and share valuation.
• Capital Recycling: The move signals a shift towards capital recycling, highlighting Metro’s agility in responding to market opportunities.
• Potential for Future Announcements: Investors should monitor Metro for updates on deployment of proceeds, which may include acquisitions, new developments, or shareholder returns.
• Strategic Partnerships: The company’s diverse operations and partnership-driven approach in key markets remain a core element of its overall strategy.

Company Profile and Strategic Focus

Metro Holdings Limited, listed on the SGX Main Board since 1973, has evolved from its origins as a textile store in 1957 to a diversified property and retail group with global investments. Its property segment owns and manages prime retail and office assets in China’s first-tier cities (Shanghai, Guangzhou) and emerging hubs (Chengdu), and has expanded to Singapore, Indonesia, the UK, and Australia through strategic partnerships.

The retail division operates two flagship Metro department stores in Singapore, maintaining a strong brand presence as a household name in the retail sector.

Conclusion for Investors

Metro Holdings’ divestment of its 26% stake in Boustead Industrial Fund is a substantial financial event with potentially positive implications for its balance sheet and strategic direction. The sizable cash proceeds and portfolio realignment may trigger share price movements and warrant close attention from shareholders. The company’s focus on capital recycling and strategic investment flexibility signals a proactive approach to value creation.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions. All facts are based on the official news release and may be subject to change as the transaction completes.

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