Boustead may launch REIT in 2020: analyst

BP's June portfolio occupancy is slightly higher than the average industrial REIT.

Engineering services firm Boustead Singapore is on track for a REIT listing after the portfolio asset base of its subsidiary, Boustead Projects’ (BP), hit $1b, according to an analyst report by CGS-CIMB.

“With the help of higher occupancy rate after the completion of the ALICE asset stabilisation, we think a REIT listing could materialise as early as CY20F. We think this could unlock significant value, as the investment properties are accounted for at cost less depreciation,” said Khang Chuen Ong, analyst at CGS-CIMB.

ALICE@Mediapolis is Boustead Projects’ multi-tenanted business park development.

The REIT could unlock shareholder value, potentially through a special dividend, as BP’s investment properties are accounted for at cost less depreciation. This could be possible through a special dividend and establishment of a REIT platform could accelerate BP’s future capital recycling.

Boustead Singapore’s industrial real estate segment is currently operated by BP, which is able
to eventually bid for higher-value contracts such as construction of data centres. The firm also intends to target more public-sector projects in Singapore, building on its recent wins from JTC Corporation and Surbana Jurong.

As at end-Jun 2019, BP’s leasehold portfolio comprised 21 industrial properties in Singapore with a total GFA of c.370,000 sq m – 17 completed properties and four properties under development. Out of the 21 facilities, 12 are BP’s wholly-owned properties and nine are held by JVs (BP’s stake in the JVs range from 30% to 51%). Figure 7 includes details for BP’s leasehold portfolio.

BP’s portfolio occupancy hit 94.1% in June, slightly higher the average of Singapore industrial REITs of 93.3%.