Boustead Projects

[BlackCat]

BP-leasing looks like something I've always wanted.  A REIT without debt! (Edit: Not really a REIT...REIT-like)

Does anyone know where the recently sold Triple-One Sommerset (Perennial) was recorded on the company's balance sheet?  I cant find it under the Associated Companies (footnote 18) or JVs (note 19). So it must be one of the two "Financial Assets available for sale" (note 21)?

[Bibi]

Currently its is also a REIT without giving out any dividends to shareholders right?

[weijian]

hi folks,
As REITs generally have debt (the only way for them to improve ROE is to gear up) and also are mandated to distribute at least 90% of their net income, i took a look at its corporate website and i dont think it is a Real Estate Investment Trust (REIT) as per conventional definition. Please do add a "XXX" if you think it is REIT-like, so as not to confuse everyone.

http://www.bousteadprojects.com/corporat...utions.pdf

[Gin]

BP-leasing looks like something I've always wanted.  A REIT without debt!

Does anyone know where the recently sold Triple-One Sommerset (Perennial) was recorded on the company's balance sheet?  I cant find it under the Associated Companies (footnote 18) or JVs (note 19). So it must be one of the two "Financial Assets available for sale" (note 21)?

Yes. It is listed under Note 21. Specifically "Equity securities, at fair value", amounting to S$17.9 million. Hence the profit recognition upon sale to be S$8.9 million. Beijing Tongzhou Integrated Development (Phase 1) is the other one which was recorded at cost.

[BlackCat]

Thanks Gin, for confirming that.


Both their properties-for-sale & investment properties seem to be recorded *way* below market value.

I think the main risks for this stock are the timing:

• with the large amount of Industrial property scheduled to finish development this year, may take a while for the market to digest.
  
• And we are overdue for a recession (...same risk as any stock).
  

[Bibi]

hi folks,
As REITs generally have debt (the only way for them to improve ROE is to gear up) and also are mandated to distribute at least 90% of their net income, i took a look at its corporate website and i dont think it is a Real Estate Investment Trust (REIT) as per conventional definition. Please do add a "XXX" if you think it is REIT-like, so as not to confuse everyone.

http://www.bousteadprojects.com/corporat...utions.pdf

Ah I see. I really thought it was a reit. Thanks for the clarification Weijian.

[Gin]

Thanks Gin, for confirming that.


Both their properties-for-sale & investment properties seem to be recorded *way* below market value.

I think the main risks for this stock are the timing:

• with the large amount of Industrial property scheduled to finish development this year, may take a while for the market to digest.
  
• And we are overdue for a recession (...same risk as any stock).
  

Indeed. At current market prices, one can consider the relatively stable industrial leasing business to be fairly valued at ~15x pretax earnings, and the design-and-build business, and other investments, to come FOC.

[ksir]

an interesting and rather well researched report from CIMB on BP.
https://brokingrfs.cimb.com/rpteuGeQvlwK...18DuQ2.pdf


Long wale of 7 years is something new.
The current vacant buildings and the potential development is another interesting area to know.

<vested, core>

[slowandsteady]

an interesting and rather well researched report from CIMB on BP.
https://brokingrfs.cimb.com/rpteuGeQvlwK...18DuQ2.pdf


Long wale of 7 years is something new.
The current vacant buildings and the potential development is another interesting area to know.

<vested, core>

Thanks ksir, it's a very good report with breakdown of the individual properties. My investment thesis for BP has always been the design-build-lease model, and the strong counter parties. To be honest, I'm surprised BP has not yet been spun out into a REIT, as the stable income from long leases is perfect for dividend investors. My view of this is that management is holding out for a better timing for that, and also that BP is currently in the growth phase where they see opportunities to increase AUM before going for it.

[ksir]

an interesting and rather well researched report from CIMB on BP.
https://brokingrfs.cimb.com/rpteuGeQvlwK...18DuQ2.pdf


Long wale of 7 years is something new.
The current vacant buildings and the potential development is another interesting area to know.

<vested, core>

Thanks ksir, it's a very good report with breakdown of the individual properties. My investment thesis for BP has always been the design-build-lease model, and the strong counter parties. To be honest, I'm surprised BP has not yet been spun out into a REIT, as the stable income from long leases is perfect for dividend investors. My view of this is that management is holding out for a better timing for that, and also that BP is currently in the growth phase where they see opportunities to increase AUM before going for it.

The reason from Management is always and consistently the lack of scale. 
Who do not want to list the REIT and earn tax free profit and management fee? 
However, IIRC, they insist NOT to do financial engineering (as in just lump in with other industrial building owners and provide master lease with rental guarantee). REIT shouldn't be a place to throw shxx to ignorant-yet-chasing-yield investors.

However, Investors hoping to earn quick Dividends from this Company should not hold their breath.