Boustead Projects has entered into several transactions for the joint redevelopment of a logistics and manufacturing facility at 36 Tuas Road. The facility has a total gross floor area (GFA) of 59,800 sqm.
The transactions will be entered into with two accredited investors.
On June 23, Boustead Projects announced that it has entered into a units purchase agreement with each of the two investors where it will sell its units in the Boustead Real Estate Fund (BREF) for an aggregate consideration of $8.9 million.
The consideration was commercially agreed upon between Boustead Projects and the investors following negotiations and taking into account factors such as the net book value of the units, BREF’s potential and prevailing market conditions.
Based on BREF’s unaudited balance sheet as at March 31, the aggregate book value and net tangible asset (NTA) value of Boustead Projects’ interests in the units sold are approximately a deficit of $0.8 million.
Concurrent with the proposed sale of units, Boustead Projects has entered into a subscription agreement where it will commit up to $33.15 million to subscribe for and be allotted and issued units in BREF.
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The amount was arrived at based on the estimated proportionate commitment of funding by Boustead Projects to fund the joint redevelopment. The amount also takes into consideration the current estimated development costs as well as the estimated working capital reserve for the redevelopment prior to its stabilisation.
In connection with the proposed subscription, the investors have also each entered into a subscription agreement where each investor has committed to subscribe for and be allotted and issued their respective portion of units in BREF to fund the project.
The completion of the proposed transactions is conditional upon the receipt of the fund manager of the relevant approval letters, consents and associated documentation from JTC Corporation for the project.
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The proposed transactions are said to enable Boustead Projects to redevelop 36 Tuas Road to cater to the logistics and selected manufacturing sectors where there is good demand and limited supply for high quality logistics and warehousing facilities. The redevelopment will maximise the property’s plot ratio, which had been underutilised previously. It is expected to be completed in the first half of 2025.
Shares in Boustead Projects closed flat at 95.5 cents on June 23.
