Metro Holdings and Boustead Projects, together with an independent institutional third-party, will jointly acquire J’Forte Building, an eight storey high-spec industrial property at 26 Tai Seng Street at a purchase price of $98.8 million.
On Jan 30, Boustead Industrial Fund (BIF) through its trustee Perpetual (Asia) executed a Put and Call Option Agreement (PCOA) with property vendor Suki Sushi. This will be BIF’s first acquisition in the open market. BIF’s sponsor is Boustead Projects and the manager is Boustead Industrial Fund Management.
The property will be acquired via BIF at a purchase consideration of $98.8 million, excluding any upfront land premium payable to JTC Corporation. The total cost of the acquisition is estimated to be $109.5 million, factoring in the estimated upfront land premium for the balance of the property’s first 30-year leasehold land tenure.
J’Forte Building has a gross floor area and land area of approximately 17,931 square metres and 6,589 square metres respectively. The property has a leasehold land tenure of 30 years commencing from 9 June 2007, with an option to renew for a further leasehold land tenure of 30 years. It also has major tenants in the food and beverage (F&B), lifestyle and banking sectors, including Suki Sushi’s own F&B operations.
The property is in a prime location with good accessibility to Tai Seng MRT Station, the Kallang-Paya Lebar neighbourhoods and Pan-Island Expressway (PIE). It is also zoned for food processing operations — the availability of similarly zoned properties is limited in the area — and has a long remaining leasehold land tenure of about 44 years, with a 10-year leaseback from the vendor of their existing space.
BIF will fund the investment with the issuance of up to $10.9 million units in BIF and $50.0 million of 7.0 per cent notes due 2031 as part of its $1 billion notes programme, in addition to bank borrowings.
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Under this joint acquisition, Metro Group, Boustead Projects, through its wholly-owned subsidiary BP-Real Estate Investment, and the independent third-party will subscribe to 26%, 25% and 49% respectively in both the units in BIF and 7.0% notes.
In a joint press statement, the partners say that this acquisition builds upon their entry into the highly sought-after industrial real estate market in Singapore first announced on December 31 2020, with an initial acquisition of interests in a quality portfolio of 14 assets via BIF.
On 22 October 2021, BIF acquired a high-spec industrial property at 351 Braddell Road, bringing the total number of properties in which it has interests to 16. This comprises six industrial properties, one business park, six high-spec industrial properties and three logistics properties located across Singapore and within proximity to transportation nodes.
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This will bring BIF’s total assets under management to approximately S$749 million, with a high committed average occupancy rate of 98% and a long weighted average lease expiry (WALE) of approximately 6.1 years.
Boustead Projects executive deputy chairman Wong Yu Wei says: “We are pleased to mark the new year with BIF’s first open market acquisition. This transaction demonstrates the ability of our strategic partnership to build a resilient real estate portfolio in the highly sought-after Singapore industrial real estate sector.”
“The J’Forte Building is a good addition to the BIF portfolio given its high-specifications, prime location, long remaining leasehold land tenure of about 44 years and zoning for food processing operations, which is in limited supply in the area,” says Wong.
Metro Holdings group CEO Yip Hoong Mun adds: “The J’Forte acquisition deepens Metro Group’s investment in our home market — Singapore. It also marks our continued collaboration with BPL, an established and reputable real estate developer and operator. Investment in the resilient and growing industrial sector will generate stable and recurring income for the Metro Group."