Boustead Singapore plans to sell its stake in 1 One-North Crescent to the REIT
UIB Holdings Ltd, a Macquarie Asset Management-controlled fund manager, is a step closer to an initial public offering of its sponsored UI Boustead REIT after receiving an eligibility-to-list letter from the Singapore Exchange.
As part of the process, Boustead Singapore plans to sell its interests in 15 of the 21 city-state properties that form part of the seed portfolio of the trust, the SGX-listed engineering firm said Tuesday in a filing. UIB Holdings Ltd was formed last March when Macquarie portfolio company Unified Industrial acquired the property and fund management business of Boustead.
The proposed divestments, including a roughly half-stake in the Razer Southeast Asia headquarters, have a gross asset value of S$218.7 million, said Boustead, which plans to sell the properties at market value and reinvest S$202.8 million for a 16.9 percent stake in the REIT. The firm expects a disposal gain of S$154.6 million ($122.2 million) from the transactions.
“The contribution of the group’s interest in the Singapore properties to UI Boustead REIT would enable the group to consolidate its stakes in completed and stabilised industrial real estate assets into a single liquid and tax-efficient investment vehicle, under the management of UIB,” Boustead said.
Premarketing Begins
A term sheet seen by Reuters on Monday showed that Boustead had begun premarketing the IPO, with investor education due to begin this week and the offer size and lock-up period yet to be finalised, the news agency reported Tuesday.
James Kemp, head of real estate for Asia Pacific at Macquarie Asset Management
The proposed REIT portfolio includes 21 leasehold properties in Singapore and two freehold assets in Japan. The entire portfolio spans 5.9 million square feet (548,128 square metres) of gross floor area, yielding 5.3 million square feet of net lettable area.
Nearly 70 percent of the S$1.9 billion total agreed property value of the IPO portfolio comes from the Singapore assets, with the Japan properties making up the rest. Boustead’s interests in the 21 Singapore assets account for just under 25 percent of the IPO portfolio value.
Among the properties to be included in the listed trust are business park complex 29 Media Circle (also known as Alice at Mediapolis), as well as industrial assets 8 & 12 Seletar Aerospace Heights and 11 Seletar Aerospace Link.
The REIT will also acquire a 12-asset portfolio from Boustead Industrial Fund and purchase the 1 One-North Crescent business park, which serves as the Southeast Asia headquarters of gamer gear maker Razer, from a Boustead joint venture.
Final Say to Come
The SGX’s eligibility-to-list letter confirms that the proposed listing meets the bourse’s requirements in principle, enabling the issuer to proceed with preparatory steps like finalising the prospectus and marketing the deal, though it does not constitute final approval, according to the Tuesday filing.
By reinvesting part of the divestment proceeds into UI Boustead REIT, Boustead Singapore would remain anchored as a partner and shareholder of the sponsor, as well as the controlling unitholder in UI Boustead REIT, the firm said.
With Macquarie holding a majority stake in UIB Holdings Ltd, Boustead Singapore has a roughly 20 percent stake in the entity, with Unified Industrial founders Josh Olsan and Ross Antoci also owning minority stakes in the company.
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