Boustead to hive off real estate business; subsidiary to take 24.1% stake in Unified Industrial

SINGAPORE – Boustead Singapore’s subsidiaries have entered into a master share subscription agreement with Hong Kong-based real estate company Unified Industrial and will form a new logistics platform. 

The Singapore-listed company has agreed to transfer its fund and property-management businesses to Unified Industrial.

As part of the agreement, Boustead Singapore’s subsidiary BP-Unity will take a 24.1 per cent stake, equivalent to 35.5 million shares, in Unified Industrial.

The 35.5 million new ordinary shares, which will be issued, will have a total subscription value of US$78.6 million.

In a March 12 statement, Boustead Singapore noted that for more than 20 years, the group has partnered with government agencies to deliver industrial real estate solutions in Singapore.

As the sector evolved, rising project costs and increasing complexity, especially in high-value segments, have required significant capital investment. To meet regulatory and commercial requirements, the group has had to commit substantial funds to maintain majority ownership in certain projects.

Boustead Singapore said that the proposed transaction will be in the best interests of the group as it will facilitate future capital-raising opportunities.

The group may no longer need to commit substantial co-investment positions for funding future development projects in Singapore and Vietnam, which allows for the allocation of capital to other investments that may generate potentially higher returns for the shareholders of the company, it said. 

It added that the proposed transaction will result in geographic diversification into the Japan and China markets, and potentially to other identified growth markets.

Subject to the successful execution of business plans in the next five years, the transaction could potentially create value for the group given its stake in a regional Pan-Asian logistics and industrial platform.

The proposed acquisition is expected to lift Boustead Singapore’s net tangible assets attributable to owners of the company to $524.2 million from $502.5 million, assuming the transaction had taken place on March 31, 2024, at the end of the company’s last financial year. 

Earnings per share would have risen to 16.8 cents from 13.4 cents.

The new platform, UIB, will target real estate opportunities in high-growth sectors, particularly in logistics and data centres, both of which are experiencing growing demand driven by e-commerce, digitisation and regional supply chain realignment in the Pan-Asia region.

UIB will have US$3.5 billion of assets under management across Japan, China, Singapore and Vietnam. 

The move comes after Boustead Singapore succeeded in taking its subsidiary, Boustead Projects, private. After the first two offers to do so fell through, shareholders of Boustead Projects finally accepted Boustead Singapore’s third cash exit offer at $1.18 per share, representing a 24 per cent premium of the previous offer.

THE BUSINESS TIMES