UI Boustead REIT (SGX:UIBU
) announced that it has entered into various agreements to co-invest in the development of UIB Konan Phase 3, which comprises of two logistics facilities in Konan City, Shiga Prefecture, Japan.
Upon completion of the development, it will be managed by UI Japan, a wholly-owned subsidiary of UIB Holdings Limited, which is also the REIT’s sponsor.
UI Boustead REIT will hold a 24.26% effective interest in the development, together with a Tokyo Stock Exchange-listed corporation, Fraxtor UIB Konan Pte Ltd 3 (Fraxtor) and the Sponsor.
Both the Sponsor and Fraxtor have provided a purchase option to UI Boustead REIT to fully acquire UIB Konan Phase 3 upon completion of the development.
According to the REIT, the total development cost for UIB Konan Phase 3 is around JPY 10.3 billion ($84.1 million).
Including transaction costs, the REIT’s share of the total investment value is around $20.8 million, of which its capital commitment is approximately $7.3 million and will be funded by internal funds and/or existing debt facilities.
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This will increase the REIT’s pro forma aggreagate leverage from 37.9% to 38.6% upon completion of the development, which is slated to compete in the second quarter of 2027.
“The development marks UI Boustead REIT’s first investment post its initial public offering in March 2026. We would like to thank our Sponsor for this valuable opportunity which allows the REIT to capture attractive upside and value-accretion once the project is stabilised,” says Tan Shu Lin, CEO of the manager.
Units in UI Boustead REIT closed 0.5 cents lower or 0.61% down at 82 cents on April 24.
