Boustead Projects joint venture to buy IBM's Tampines technology park property for $77.4m

An IBM logo seen at the Mobile World Congress in Barcelona, on Feb 25, 2019. PHOTO: REUTERS

SINGAPORE - Boustead Projects Limited's 51 per cent-owned JV company, BP-TPM LLP, is buying IBM's manufacturing facility in Tampines for $77.4 million.

Completed in 2010, the three-storey light industrial building has a gross floor area of 430,999 square feet.

Located at 6 Tampines Industrial Avenue 5, the IBM Singapore Technology Park is currently leased to IBM by landlord JTC Corp for a 30-year period that began on May 10, 2009, with a renewal option of another 30 years.

The IBM facility was shut down in April this year after having been in operation for nine years, according to media reports.

The deal will be funded by a combination of equity and bank borrowings, with Boustead Projects contributing $14.2 million for the equity portion.

The main objective is to derive long-term leasing income, said Boustead.

The purchase comes under Boustead Development Partnership, a co-investment partnership between Boustead Projects and the Abu Dhabi Investment Council.

The council owns Al Sariya Real Estate, which holds a 49 per cent share of the JV company.

An initial $1.2 million deposit will be made, with a second deposit of $2.7 million due upon the execution of the sales and purchase agreement.

An undisclosed amount will be also paid to JTC Corp for the upfront land premium.

BP-TPM LLP intends to hire Boustead Projects E&C Pte Ltd, a subsidiary of Boustead Projects, for the asset enhancement works for the Tampines property.

Boustead Projects is an industrial real estate solutions provider, and a 53 per cent-owned subsidiary of fellow mainboard-listee Boustead Singapore.

CGS-CIMB analysts have previously said Boustead Projects could launch a Reit in 2020. In a letter to shareholders in its FY2019 report, Boustead Projects said "we have reached a stage where various options to monetise the value of our leasehold portfolio are under active review by (our) board".

Its shares were up $0.015 or 1.6 per cent to $0.935 as at 11.26am.

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