UI Boustead Reit: A new entrant in Singapore’s industrial Reit space

[SINGAPORE] UI Boustead Reit is expected to commence trading on the SGX mainboard on Mar 12. The Reit has a mandate to invest in logistics, general industrial, hi‑specs industrial and business space properties across the Asia-Pacific region.The initial public offering (IPO) portfolio comprises 23 properties, of which 21 are leasehold assets located in Singapore and two are freehold properties in Japan. The total agreed property valuation stands at S$1.9 billion, with a total gross floor area of 5.9 million square feet and a net lettable area of 5.3 million sq ft. The portfolio is well-diversified across the various property types, with no single property type contributing more than 30 per cent of the agreed property value.The Reit’s portfolio currently has an occupancy rate of 89.4 per cent. Key properties include Razer’s South-east Asia headquarters, Edward Boustead Centre, GSK Asia House and Rolls‑Royce Solutions Asia. The top 10 tenants contribute 54 per cent of net property income, with nine out of the top 10 tenants being Fortune 500, Fortune 500 Europe and publicly-listed multinational corporations. The average weighted average lease expiry for the top 10 tenants is 8.4 years.According to the IPO prospectus, there is potential for positive rent reversions across the portfolio. All single‑tenanted properties have contractual built‑in rental escalations, providing certainty in organic growth potential. The average rental escalation from single‑tenanted properties is projected at 2.2 per cent for projection year 2027. In addition, about 420,000 sq ft of space is currently under negotiation, which could contribute an additional 8 per cent of incremental occupancy uplift if concluded.The Singapore properties have achieved average rent reversions of between 7.5 and 11.5 per cent for leases renewed in FY24 and FY25, and a positive rent reversion of 11.3 per cent for renewals committed between Apr 1, 2025, and Sep 30, 2025.UIB, as the sponsor of the Reit, was formed through Unified Industrial’s acquisition of Boustead’s fund and property management business. The sponsor currently manages total assets under management across Asia of US$4 billion. Both UIB and Boustead Projects have granted a right of first refusal to UI Boustead Reit over their respective pipeline of relevant real estate assets. Additionally, the sponsor has indicated that the Reit will serve as the sole capital recycling vehicle for its Pan‑Asian stabilised industrial and logistics assets.At an issue price of S$0.88 per unit, the Reit is expected to raise about S$1 billion (including the over-allotment option exercised in full) and have an initial market capitalisation of approximately S$1.2 billion. Based on this issue price, the Reit has a price to net asset value of 1.0 times. The forecast distribution yield is 7.4 per cent for forecast year 2026 and 7.8 per cent for projection year 2027. The aggregated leverage ratio is estimated to be 37.9 per cent at IPO.Cornerstone investors have committed to acquire 31.4 per cent of the IPO units, including Amova Asset Management, JPMorgan Asset Management (Singapore), Amundi Singapore, Jumbo Group and Boustead CEO Wong Fong Fui.Following the listing of UI Boustead Reit, the number of industrial S‑Reits in Singapore will rise to eight, making industrial S‑Reits the second‑largest property sub‑segment by the number of Reits, after diversified S‑Reits.The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the S-Reits & Property Trusts Chartbook.