Boustead Singapore Approves Landmark Real Estate Transaction and REIT Listing at Extraordinary General Meeting

Key Highlights from the EGM

• Shareholder Approval for S\$1.9 Billion Asset Divestment & REIT Listing: Boustead Singapore Limited (the “Company”) has secured strong shareholder backing for its proposed divestment of significant real estate assets and the public listing of the UI Boustead REIT.
• Strategic Restructuring: The transaction involves the divestment of interests in 19 assets, the issuance of bonds relating to three assets, and the subscription of up to S\$202.8 million in the new REIT. The Company is expected to hold approximately 16.9% of REIT units post-listing.
• Significant Value Realisation: The deal is expected to generate a fair value gain of around S\$155 million and gross proceeds of S\$258.7 million, with post-transaction NTA and EPS seeing substantial increases.
• Strategic Partnership with UIB Holdings: Boustead’s collaboration with UIB, in which it holds a 24% stake, enables access to a pan-Asian real estate platform and capital-efficient expansion in markets such as Singapore, Japan, and China.
• Investor Protections and Capital Recycling: The Company will grant a right of first refusal to the REIT for future relevant industrial real estate investments, supporting continued capital recycling for growth.
• Shareholder Votes Overwhelmingly in Favour: 99.95% of votes cast supported the transaction, reflecting broad investor confidence.

Details of the Proposed Transaction

The Meeting, chaired by Mr Wong Fong Fui, was attended by 170 shareholders and proxies, the full Board (with one apology), and key management, legal, audit, and registry representatives. The Chairman and management provided an extensive briefing on the strategic rationale, structure, and expected impact of the proposed listing of UI Boustead REIT and associated asset divestments.

• Portfolio Composition: UI Boustead REIT’s IPO portfolio will consist of 23 assets (21 in Singapore, 2 in Japan), valued at approximately S\$1.9 billion. The Company’s subscription will result in a 16.9% unitholding in the REIT.
• Transaction Structure:
  • Direct divestment of 7 assets to the REIT.
  • Transfer of Boustead’s 25% stake in Boustead Industrial Fund (BIF), which holds 12 assets, to the REIT.
  • Bond issuance for 3 assets, with the REIT subscribing and Boustead using the proceeds for growth and dividends.
• Financial Effects:
  • Pro forma profit attributable to shareholders for FY2025 is expected to rise from S\$95.0 million to S\$234.2 million, mainly due to an estimated S\$135.4 million gain on divestment.
  • EPS is set to increase from 19.6 cents to 48.2 cents; NTA per share to rise from 117.7 cents to 149.2 cents.
• Use of Proceeds: After deducting S\$8.0 million in transaction costs and S\$5.6 million for IPO expenses, up to S\$202.8 million will be reinvested into REIT units, ensuring continued exposure to recurring income while freeing capital for new projects.
• Right of First Refusal: Boustead will grant the REIT a right of first refusal over future industrial real estate investments, but retains full discretion on divestment timing and pricing.

Shareholder Q&A – Important Insights

• Special Dividends: While shareholders queried the possibility of a special dividend from the transaction proceeds (suggested at ~10 cents per share), the Board declined to comment on specifics, noting any distribution would require Board approval.
• Direct IPO Participation: Shareholders will not be offered a direct allocation of REIT units. The Company’s interest in the REIT is intended to be retained as a strategic investment.
• Future Asset Injection & Geographic Focus: The REIT has a Pan-Asia Pacific mandate. While assets from Vietnam and certain Chinese properties are currently excluded, the REIT may acquire further Asian assets if suitable and accretive.
• UIB’s Strategic Role: UIB will function as a funds management platform, managing the REIT and other Asian investment vehicles, with Boustead holding a significant 24% interest. UIB’s founders operate the China and Japan businesses, but Macquarie Asset Management is the majority shareholder.
• Growth Prospects and Competitive Positioning: Management highlighted the Group’s track record, the resilience of the design-build-lease model, and the ability to grow internationally despite local market consolidation and dominance by government-linked companies. The REIT structure is seen as a scalable, investor-friendly platform for further growth.
• Regulatory Constraints: The Board noted that certain details regarding REIT fee structure and growth strategy would only be disclosed upon publication of the REIT’s prospectus, in compliance with regulations.

Resolutions and Voting Outcome

• Ordinary Resolution Passed: The Meeting approved the Proposed BPL Transactions, including the divestments, subscriptions, payment of related fees, and delegation of authority to the Board to execute all necessary actions.
• Voting Results: Of 307,336,668 votes cast, 99.95% were in favour, with only 0.05% against. The Meeting concluded with the formal approval of the transaction.

Potential Share Price Impact and Price Sensitive Matters

THIS TRANSACTION IS HIGHLY PRICE SENSITIVE AND POTENTIALLY SHARE PRICE MOVING:

• The significant increase in NTA and EPS, coupled with a large divestment gain and capital recycling for continued growth, materially strengthen Boustead’s fundamentals and recurring income base.
• The creation and public listing of a new REIT, with Boustead as a major unitholder and sponsor, provides a platform for future monetisation, capital efficiency, and investor appeal.
• However, the lack of direct IPO allocation to existing shareholders and the uncertainty on special dividends may temper some immediate retail enthusiasm.
• Regulatory approvals and successful completion of the REIT IPO remain key risks to completion.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy/sell any security. Investors should review the official company circulars and prospectus, consider their own financial situation, and consult their financial advisor before making investment decisions. The completion of the proposed transactions is subject to regulatory and market conditions.

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