Edward Boustead Centre is among the assets owned by Boustead Industrial Fund (Picture: EdgeProp Singapore)
Metro Holdings is divesting its 26% interest in the Boustead Industrial Fund (BIF). The sale comes ahead of Boustead Singapore’s proposed listing of UI Boustead REIT (UIB REIT).
BIF is a private real estate trust that owns 15 industrial, business park, high-spec industrial and logistics properties across Singapore with a combined net lettable area of about 2.2 million sq ft. Twelve of the properties are wholly-owned by BIF. The other three properties are 49% held by BIF through holding entities.
BIF is jointly held by Boustead, Metro and AP SG 21. Boustead holds a 25% interest in BIF through Boustead Projects, while AP SG 21 holds 49% interest. Metro holds the remaining 26% interest in BIF through its wholly-owned subsidiary Metrobilt Construction.
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In a Feb 10 filing to the Singapore Exchange (SGX), Boustead announced it had received an eligibility-to-list letter for UIB REIT’s proposed listing on the Mainboard of the SGX. As part of the proposed listing, Boustead is divesting its interests in various assets to the REIT, including those held through BIF.
Separately, Metro announced the divestment of its stake in BIF to UIB REIT. The 12 properties directly owned by BIF will be sold in its entirety to UIB REIT, with Metrobilt Construction, Boustead Projects and AP SG 21 all selling their respective stakes in BIF to the REIT.
For the remaining three properties, the holding entities have each entered into put and call option agreements to sell their 49% interest to UIB REIT. Upon completion of the divestment, net proceeds from the sale of the properties will be distributed to BIF’s unitholders in proportion to their respective unitholdings.
Metro says Metrobilt Construction will receive cash from the sale of its units in BIF, the distribution from the properties sold through the put-and-call option agreements, and the redemption of its share of the 7% notes issued by BIF’s trustee. The company expects to receive net sale proceeds of $116 million after deducting legal and professional fees and expenses.
Meanwhile, the sale of BIF’s assets puts Boustead one step closer to spinning off its industrial properties through UIB REIT. In January, Bloomberg reported that the REIT is eyeing an IPO in March, with targeted proceeds of at least $900 million.
UIB REIT's initial portfolio will comprise 23 logistics and industrial properties that are valued at $1.9 billion. They consist of 21 leasehold properties in Singapore and two freehold properties in Japan.