UI Boustead Reit, Fraxtor Group to develop two Japan logistics facilities

[SINGAPORE] UI Boustead Real Estate Investment Trust (Reit) has entered into a joint venture with Fraxtor Group to develop two logistics facilities in Japan, said the Reit manager in a bourse filing on Friday (Apr 24).Total development costs, including base construction and financing expenses, are approximately 10.3 billion yen (S$84.1 million), of which UI Boustead Reit’s share is about 2.5 billion yen.When completed, the development will be managed by UI Japan, a wholly owned subsidiary of UI Boustead Reit’s sponsor UIB Holdings. The Reit will hold a 24.26 per cent effective interest in the development, together with a Tokyo Stock Exchange-listed corporation, Fraxtor UIB Konan and the sponsor. UI Boustead Reit’s effective total investment is expected to be about S$20.8 million. Known as UIB Konan Phase 3, the project will be developed on a 574,246 square foot (sq ft) site next to existing logistics assets owned by the Reit. The land comes with a 70-year usage right expiring in 2096. Navigate Asia ina new global orderGet the insights delivered to your inbox.Slated for completion in the second quarter of 2027, the two logistics facilities at UIB Konan Phase 3 will have a total gross floor area of 518,162 sq ft and net lettable area of 508,880 sq ft. “The development marks UI Boustead Reit’s first investment post its initial public offering in March 2026,” said Tan Shu Lin, chief executive officer of the Reit manager. “We will continue to create long-term value for unitholders by growing UI Boustead Reit in a risk-mitigated manner while maintaining the stability and resilience of income streams,” she added. SEE ALSOUI Boustead Reit closes 8.5% below IPO price amid broader market retreatUI Boustead Reit’s public offer of 33.9 million units 2.9 times subscribedUI Boustead Reit: A new entrant in Singapore’s industrial Reit spaceThe project is expected to bolster UI Boustead Reit’s presence in Konan City and capture spillover demand from its existing assets in the area. The Reit has an option to fully purchase the facilities upon completion. UI Boustead Reit’s manager said it expects the development to deliver an estimated yield on cost of about 4.8 per cent. It will also expand the Reit’s portfolio to 24 properties from 23. Based on its effective stake of 24.26 per cent, assets under management are projected to rise from S$1.9 billion to S$1.93 billion.Units of UI Boustead Reit ended Friday 0.6 per cent or S$0.005 lower at S$0.82, before the announcement. Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.