MAINBOARD-LISTED property players Metro Holdings and Boustead Projects, together with an independent institutional third party, will jointly acquire J&rsquo Forte Building, an eight-storey high-spec industrial property at 26 Tai Seng St, for S$98.8 million via the Boustead Industrial Fund (BIF).

 

The acquisition marks BIF&rsquo s first in the open market, both Metro and Boustead Projects said in a joint statement on Monday (Jan 30). The consideration of S$98.8 million excludes any upfront land premium payable to JTC Corporation.

 

BIF will acquire J&rsquo Forte Building from food and beverage operator Suki Sushi at a purchase price of S$98.8 million, negotiated on a willing buyer willing seller basis. The total cost of the acquisition is estimated to be S$109.5 million, factoring in the estimated upfront land premium for the balance of the property&rsquo s first 30-year leasehold land tenure.

 

BIF will fund the investment with the issuance of up to S$10.9 million of units in BIF and S$50 million of 7 per cent notes due 2031 as part of BIF&rsquo s S$1 billion notes programme, in addition to bank borrowings. BIF&rsquo s sponsor is Boustead Projects and the manager is Boustead Industrial Fund Management.

 

Under this joint acquisition, Metro Group, through its indirect wholly-owned subsidiary Metrobilt Construction, and Boustead Projects, through its wholly-owned subsidiary Boustead Projects Real Estate Investment, as well as the independent third party, will subscribe to 26 per cent, 25 per cent and 49 per cent respectively, in both the units in BIF and the 7 per cent notes.

 

For Metro, this investment via BIF through the subscription of units is up to S$2.8 million, while that of the notes is S$13 million, the group said. This totals to S$15.8 million, and the amount will be funded from internal cash sources, it added.

 

This acquisition builds upon the three partners&rsquo entry into the industrial real estate market in Singapore on Dec 31, 2020, with an initial acquisition of 14 assets via BIF. On Oct 22, 2021, BIF acquired a high-spec industrial property at 351 Braddell Road.

 

The completion of this latest acquisition will bring the total number of properties under BIF&rsquo s portfolio 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.

 

This will bring the trust&rsquo s total assets under management to approximately S$749 million, with a high committed average occupancy rate of 98 per cent and a long weighted average lease expiry of approximately 6.1 years.

 

Boustead Projects executive deputy chairman Wong Yu Wei said: &ldquo The J&rsquo 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.&rdquo

 

Metro Holdings group chief executive Yip Hoong Mun noted that investment in the &ldquo resilient and growing&rdquo industrial sector would be a &ldquo stable and recurring&rdquo source of income for the Metro Group.

PROPERTY player Metro Holdings on Friday (Nov 11) posted a 7.9 per cent year on year drop in net profit to S$16.9 million for the half year ended Sep 30.

 

This comes even as the mainboard-listed company chalked a 32.1 per cent jump in revenue to S$53.9 million in H1.

 

Earnings were dragged down by a 37.7 per cent drop in share of profit of joint ventures to S$14.9 million.

 

Metro said this was due to lower contributions from its investment properties in China, rental rebates and waivers granted to tenants brought about by disruptions from China&rsquo s zero-Covid policy, as well as sporadic lockdowns during the six-month period.

 

It noted that this was partially offset by a higher contribution amounting to S$2.5 million from its increased stake in a portfolio of properties in Australia to 30 per cent.

 

There was also a lower share of loss from the contributions of investment properties in China, the company said, attributed to Shanghai Plaza with its increased occupancy of 92.3 per cent.

 

Metro&rsquo s retail division had a 33.9 per cent year-on-year jump in revenue due to the lower base in the previous year. The company noted that its two department stores in Singapore had shorter operating hours from mid-May to mid-August as the republic went through a &ldquo heightened alert&rdquo when Covid-19 cases increased.

 

H1 earnings per share fell 9.1 per cent to two Singapore cents.

 

No dividend was declared for H1, said the company, adding that this is usually declared at the end of a financial year.

 

For the next 12 months, Metro expects geopolitical challenges and looming recession brought by headwinds such as the Russia-Ukraine war, persistent inflation and the slowdown in China.

 

It added that rising interest rates are likely to impact capitalisation rates and the valuation of its properties.

 

Geopolitical tension between the United States and China is likely to affect the company&rsquo s asset valuation and foreign exchange exposure, it said.

 

In Singapore, rising office rents should continue to benefit its Grade A office towers at the Tampines Regional Centre, which has an occupancy rate of 89.8 per cent.

 

&ldquo Rental increases were observed for all industrial asset classes during Q3 as vacancy rates remained relatively tight with city-fringe business park and Science Park rents also increasing in tandem with the broader market,&rdquo the company said, adding that Metro is &ldquo well positioned&rdquo with a portfolio of 15 industrial, business park, high-spec industrial and logistics properties in Singapore.

 

While Metro&rsquo s total retail sales grew as the economy reopened, it noted that the retail outlook is &ldquo turning cloudy&rdquo as slower growth outlook and rising interest rates weighed on consumer confidence and spending.

 

&ldquo With regard to our asset management strategy, we will prioritise critical asset enhancement, while deferring uncommitted capital expenditure, implementing cost saving measures and deploying derivative instruments to hedge the underlying interest rate exposures, where possible,&rdquo Metro said.

METRO Holdings : M01 -1.48% announced on Monday (Oct 3) the acquisition of a retail property in Australia and four student accommodations in the United Kingdom to deepen its presence across its key markets.

 

The Australian property is a freehold neighbourhood retail centre called Shepparton Marketplace in Victoria, and it was bought by Metro Holdings with its joint venture (JV) partner, Sim Lian Group of Companies, for A$91 million (S$85.7 million).

 

The UK properties, which are also freehold, were bought for about £ 74.4 million (about S$119 million). They are:

 

Iron Bridge Studios in Exeter, which is an eight-minute walk away from the Exeter College and a 19-minute walk away from the St Luke&rsquo s campus of the University of Exeter

St Giles Students in Durham, which is a six-minute walk from College of St Hild and St Bede, and a seven-minute walk from the School of Education

Gallery Apartments in Glasgow, which is a five-minute walk from Glasgow Caledonian University and the Royal Conservatoire of Scotland, and a 10-minute walk from the University of Strathclyde

73-77 Penrhyn Road in Kingston, which is adjacent to the main campus of the Kingston University.

Releasing the information in a bourse filing, the mainboard-listed property investment and development group said that the legal completion of the UK properties&rsquo acquisition, through its student accommodation fund, Paideia Capital UK Trust, took place on May 31.

 

The trust is 30 per cent owned by Sun Capital Assets, a wholly-owned subsidiary of the company, with the remaining 70 per cent held by Lim Kim Tah Holdings, Aurum Investments, and a third party. Aurum is a direct wholly-owned subsidiary of Woh Hup Holdings.

 

Metro&rsquo s group chief executive officer Yip Hoong Mun remarked that the four acquisitions&rsquo completion &ldquo during this volatile period&rdquo is testament to the capability of its joint venture partners.

 

Together with its two existing UK properties &ndash Red Queen in Warwick and Dean Street Works in Bristol &ndash Metro said its total student accommodation portfolio is now valued at £ 130.0 million.

 

Metro also noted that these properties achieved a high committed average occupancy rate of 99.2 per cent as at Jun 30.

 

Meanwhile, Metro said that the legal completion on the acquisition of Shepparton, through Sim Lian-Metro Capital, took place on Sep 30. Metro owns 30 per cent equity stake in the JV.

 

The addition will bring its Australian portfolio to a total of 17 properties, comprising four office buildings and 13 retail centres spanning four states &ndash New South Wales, Victoria, Queensland and Western Australia. Their total appraised value is A$1.2 billion, and occupancy is high as well, at 95.1 per cent, with Shepparton&rsquo s occupancy at 97.3 per cent, it pointed out.

 

THE ongoing credit situation in China&rsquo s property sector contributed to the S$36.3 million impairment losses taken in Metro Holdings : M01 -0.66%&rsquo financial year ended March 31, 2022, the property group said on Sunday (Jul 17).

 

The impairment losses were on the amounts due from associates namely, Jovial Paradise and Global Charms, both of which had invested in real estate debt instruments in China. Metro&rsquo s commitment for Jovial Paradise was S$48.7 million and S$67.7 million for Global Charm.

 

Responding to questions from shareholders ahead of its annual general meeting on July 22, Metro said: &ldquo The impairment assessment was performed based on the associates&rsquo exposure on underlying debt instruments which were tied to the associated development projects of the borrowers.&rdquo

 

The group had considered the current market and situation of China&rsquo s property sector. It took the impairment after considering the loan-to-value and net asset value coverage of the underlying debt instruments.

 

&ldquo The impairment had been considered by the auditor as part of their audit in arriving at an unqualified audit opinion on the financial statements for the financial year ended Mar 31, 2022,&rdquo Metro said.

 

Asked if its investment in DocMed Technology Pte Ltd signalled a shift in its core strategy, Metro said property investment and development as well as retail remain its core business.

 

&ldquo That said, the group is on the constant lookout for new business opportunities with good partners to further diversify for resilience,&rdquo Metro said.

 

The group has identified growth opportunities in the health tech sector during the Covid-19 pandemic. It chose to collaborate with Singapore-listed Hyphens Pharma International - DocMed&rsquo s parent company - due to its proven track record in the healthcare industry., and distribution network covering 10 other markets including Bangladesh, Brunei, Cambodia, China, Oman and South Korea. 

 

&ldquo Given the geographical overlap, there are potential synergies for both parties to capture opportunities in the region where there is presence,&rdquo Metro said. DocMed is planning to expand its integrated healthcare platform offerings in Singapore and Asia-Pacific.

 

Metro shared that its investment in DocMed underwent a &ldquo thorough investment evaluation process whereby a professional, reputable, independent third party&rdquo was engaged to conduct the valuation , before a valuation of S$60 million was arrived at.

 

METRO Holdings Metro: M01 -0.66% has formed a strategic tie-up with Japanese real estate player Daiwa House Industry to deepen investment collaboration in various asset classes, following the Singapore-listed group' s S$41.3 million investment in Daiwa House Logistics Trust for a 7.65 per cent stake.

 

The property player, in a regulatory filing on Wednesday (Jan 12), announced that it had executed a memorandum of understanding with Tokyo-listed Daiwa House Industry for investment collaboration.

 

The parties will initially focus on logistic facilities, commercial facilities, housing or any other asset class in Japan, Singapore and the Asia-Pacific region, but may include other regions.

 

This follows Metro' s investment in Daiwa House Logistics Trust Daiwa Hse Log Tr: DHLU +1.24% (DHLT), a real estate investment trust sponsored by Daiwa House Industry and listed in Singapore last November.

 

Metro chief executive officer Yip Hoong Mun said: " Metro is a cornerstone investor in DHLT. This marks our first collaboration and partnership with Daiwa House. This is in line with the Metro group' s overall investment strategy of continued diversification for resilience for sustainable recurring income, particularly in the strategic sectors and countries where we see long-term growth, and together with experienced partners."

 

PROPERTY and retail group Metro Holdings' net profit for the 6 months ended Sept 30, 2021 (H1 FY2022) shrank 7.3 per cent year-on-year to S$18.33 million.

 

Revenue was 11.1 per cent higher at S$40.78 million as its retail division reported higher sales. Last year, 2 of its department stores in Singapore were closed from April to mid-June owing to the lockdown to curb the pandemic.

 

However, gross profit was nearly flat, up 1.2 per cent at S$4.99 million, as the cost of revenue rose 12.6 per cent to S$35.79 million.

 

General and administrative expenses were also some 27 per cent higher at S$11.03 million on the back of lower government grants such as the Jobs Support Scheme.

 

Meanwhile, earnings per share dipped to 2.2 Singapore cents for the period under review, from 2.4 cents previously.

 

Group chief executive officer Yip Hoong Mun said: " We are encouraged by the progress made in H1 FY2022 towards a diversified, sustainable, resilient real estate portfolio, amidst the turbulence brought about by the Covid-19 pandemic and its variants. This validates the group' s strategy to diversify for resilience."

PROPERTY group Metro Holdings is expanding its Singapore footprint through the acquisition of a 26 per cent stake in a portfolio of 14 properties for up to S$76.6 million.

 

The portfolio comprises six industrial properties, one business park, four high-spec industrial properties and three logistics properties. They are located in various parts of Singapore and within proximity to transportation nodes, the group said on Thursday.

 

The portfolio has a total net lettable area of 1,748,105 square feet, and a committed average occupancy rate of 99 per cent. The weighted average lease expiry of the properties stands at approximately 7.7 years.

 

Metro, through its indirect wholly-owned subsidiary Metrobilt Construction Pte Ltd, entered into subscription agreements to initially subscribe for 26 per cent of the units as well as the 7 per cent notes that are due in 2031 to be issued by Perpetual (Asia) Limited in its capacity as trustee of Boustead Industrial Fund (BIF).

 

Twenty-five per cent of the units and notes in BIF will be held by Boustead Projects Limited, and the remaining 49 per cent will be held by a special purpose vehicle for institutional real estate investors.

 

Metro said the investment consideration through the subscription of units will amount to as much as S$15.2 million, while the subscription of the notes is slated to set the group back by a maximum of S$61.4 million.

 

Upon the fulfilment of conditions under the various transaction documents, the investment will result in BIF becoming an associate of the Metro Group.

 

The investment consideration was arrived at on a willing buyer willing seller basis after taking into account the expected net income to be derived from the portfolio, and will be funded by a combination of internal cash resources and external borrowings.

 

Metro said this investment marks its foray into Singapore' s " highly sought-after" industrial real estate market, and will deepen the company' s presence in the local market and further diversify from its existing investment portfolio.

 

" The outlook of the overall industrial real estate market in Singapore remains positive as the country will continue to be a favourable destination as a hub for companies worldwide and the industrial sector is poised for sustainable growth in the long term," said the group.

 

Said Metro chief executive officer Yip Hoong Mun: " We see several positive attributes for this quality portfolio, which is well diversified within key industrial, business park and logistics segments.

 

" The investment represents an excellent proposition for Metro to establish a strategic presence in the Singapore industrial real estate market with an immediate scale of 14 quality assets to generate stable and recurring income."