The REIT’s initial portfolio is expected to comprise 23 properties with 21 leasehold properties in Singapore and two freehold properties in Japan. The IPO portfolio has a total agreed property value of about $1.9 billion, subject to the finalisation of the valuations. Boustead is expected to hold up to 16.9% of the IPO units upon listing.
In Lim’s view, the REIT presents Boustead with an opportunity to monetise its industrial real estate holdings and recycle capital. It also lets the company gain exposure to a “liquid and tax-efficient investment vehicle” that’ll provide it with a steady stream of income going forward.
As part of its IPO portfolio, the new REIT will acquire all the units in Boustead Industrial Fund (BIF), including its 25% stake. Boustead’s right of first refusal (ROFR) to BIF in Dec 31, 2020, will remain intact post-listing. To Lim, this seems to suggest that there could be future opportunities for Boustead to divest its mature assets to the REIT through BIF.
UIB, as the REIT sponsor, will also grant an ROFR to the REIT over the stabilised assets in its portfolio that also align with the REIT’s investment mandate.
Lim has kept her “buy” call with an unchanged target price of $2.
“We leave our forecasts intact pending salient details such as confirmation and timeline of UI Boustead REIT’s listing, as well as final valuation figures,” she writes in her Sept 19 report.
That said, Boustead’s share price may “take a breather” in the near-term with investors potentially taking profit given the substantial run-up in its share price since the announcement of its strategic review.
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“Beyond the proposed IPO and management’s eventual allocation of the recycled capital into opportunities
across its various business units, we would also keep an eye out for Boustead’s upcoming 1HFY2026 results including order book progress and realised margins,” says Lim.
Shares in Boustead Singapore closed 2 cents lower or 1.14% down at $1.74 on Sept 19.
