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This comes as current projects under development take its leasehold portfolio asset base to $1 billion by 2020.
Boustead Projects, the industrial real estate unit of Boustead Singapore, may be on track for a Reit listing next year, reported The Business Times citing CGS-CIMB.
This comes as current projects under development take its leasehold portfolio asset base to $1 billion by 2020.
“With the help of higher occupancy rate after the completion of the ALICE asset (ALICE@Mediapolis) stabilisation, we think a Reit listing could materialise as early as calendar year 2020,” said analysts Caleb Pang and Ong Khang Chuen.
“We think this could unlock significant value, as the investment properties are accounted for at cost less depreciation,” they noted, adding that a special dividend is a possibility after a successful Reit listing.
In a recap of the firm’s July annual general meeting, Boustead Projects indicated that it would consider a Reit listing for its portfolio to unlock value. It stressed, however, that the plan for listing must be “sustainable” with an element of growth.
During the annual meeting, management said it hoped to give an announcement within a few months, without providing a firm timeline.
Despite this, CGS-CIMB’s analysts believe the potential listing could serve as a catalyst for Boustead Singapore as they initiated coverage on the stock with a target price of $1 and an “add” call.
Pang and Ong noted that Boustead is “firing on all cylinders”, as its real estate and energy-related engineering order book backlog reach a five-year high, while its geospatial segment grows steadily.
They view Boustead as an alternative proxy to the global gas and oil industry recovery trend since its pre-qualification status for a global list of engineering, procurement and construction (EPC) contractors could allow it to capitalise on the higher capex of oil majors in the future.
Additionally, Boustead’s geospatial segment is moving the trend towards the Internet of Things, Big Data and smart cities, said the analysts.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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