UI Boustead Reit posts maiden DPU of S$0.0371, a shade ahead of IPO forecast
This is despite missing its net property income forecast by 1.8%
[SINGAPORE] In its first financial result since its listing, UI Boustead Reit reported on Tuesday (Oct 27) distribution per unit of S$0.0371, some 0.8 per cent more than its prospectus forecast of S$0.0368.
The distributable income relates to the period from Jul 3, 2025, to Sep 30, 2026, and comes despite the real estate investment trust’s (Reit) net property income missing its forecast by 1.8 per cent at S$54.5 million compared with a projected S$55.5 million.
The annualised distribution yield, based on its Sep 30 closing price of S$0.81 per unit, works out to 8.3 per cent, said the Reit’s manager in an evening bourse filing.
The first distribution will be paid to unitholders on Dec 7, 2026, after the Nov 4 record date.
The Reit manager’s chief executive, Tan Shu Lin, noted in a press release that the “credible first set of results (comes) in spite of significant macroeconomic headwinds and volatility in foreign exchange and interest rates during the period”.
She also pointed to the resilience of the group’s diversified portfolio and the Reit manager’s proactive capital management efforts.
“We executed on our differentiated investment strategy via two co-development projects in Singapore and Japan in partnership with the sponsor, which enabled us to achieve higher returns on a risk-mitigated basis,” she said.
“The options to purchase the balance interest in the respective properties upon completion provide UI Boustead Reit with a highly visible acquisition pipeline which further underpins future growth.”
Occupancy bleaker than expected
The Reit attributed its below-forecast net property income of S$54.5 million recorded for the period to lower-than-expected occupancy and a weaker yen against the Singapore dollar.
In a business update released on Jul 27, the Reit’s net property income for an earlier period from Mar 12 to Jun 30 was reported to be S$29.2 million, some 4.3 per cent below its IPO forecast.
Its portfolio committed occupancy as at Sep 30 stood at 97.3 per cent, made up by a 100 per cent Japan portfolio and a 95.8 per cent Singapore portfolio, which is 1.2 per cent lower quarter-on-quarter due to lower occupancy in the logistics segment, said the release.
The Singapore portfolio saw positive rental reversion of 5.1 per cent during the Q2 FY2027 period with stronger reversions recorded in the logistics segment at about 9.2 per cent.
Meanwhile, committed occupancy for its Japan portfolio remained at 100 per cent, with some 13,000 sq ft of leases renewed in Q2 FY2027 at the same rent.
The weighted average lease expiry for its Singapore portfolio was, as at Sep 30, five years; while that of its Japan portfolio was 7.3 years, with minimal lease expiries over the next two financial years.
For September 2026, around 64.6 per cent of UI Boustead Reit’s tenants are said to be from the high-tech, value-add and innovative sectors.
The portfolio committed occupancy figures for Singapore excludes its Hi-Specs Industrial property at 84 Boon Keng Road as asset enhancement initiative works began in June.
Works are underway to convert and reposition the property from a single-tenant to a multi-tenant building, at an estimated cost of S$2.6 million.
These works provide re-leasing upside as the rental rate on the single-tenancy property is significantly below current market rents for multi-tenant properties located in the vicinity, said the press release.
Some two-fifths of the net lettable area is already pre-committed ahead of the estimated completion of the works at the year-end.
Outlook
In Singapore, demand and supply dynamics remain benign in the logistics, hi-specs industrial and general industrial segments, and are supportive of a stable performance overall, said the Reit’s manager.
While macroeconomic uncertainties may constrain business space demand and weigh on rental growth, the limited pipeline of new supply over the medium-term is expected to contain vacancy risk, it noted.
In Japan, demand for the Reit’s logistics properties in Greater Osaka and business space ones in Tokyo remains supported by resilient domestic demand, sustained wage growth and continued business investment amid a tight labour market, it added.
UI Boustead Reit’s portfolio currently comprises 23 completed properties – 21 in Singapore and two properties in Japan – with a total gross floor area of some 5.9 million sq ft, and total portfolio value of around S$1.9 billion.
Its units ended Tuesday flat at S$0.78 before the announcement.
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