Jumbo Group to acquire leasehold interest in Tai Seng Street property from Boustead Industrial Fund

[SINGAPORE] Jumbo Group is proposing to acquire a leasehold interest in a 26 Tai Seng Street property owned by Boustead Industrial Fund (BIF), a private real estate trust set up by Boustead’s real estate solutions division, Boustead Projects.

Jumbo Group currently occupies more than half the leasable area in the property under a long-term lease arrangement, and the site is integral to its central kitchen, logistics and training operations.

Hence, the potential acquisition allows it to take a position as a co-investor to mitigate exposure to future rental volatility, reduce risks of relocation disruptions and enhance visibility over long-term occupancy and cost structure, said the group on Monday (Jan 19).

“Participating in the acquisition of an interest in the property aligns with the group’s strategy of securing operational stability for key facilities that support our core business activities,” Jumbo Group said.

“The proposed investment also allows the group to plan capital deployment in a measured and phased manner, while continuing to benefit from the operational synergies already established at the property,” it added.

The acquisition will be enacted through a special purpose vehicle that will be established by Jumbo Group’s wholly owned subsidiary Jumbo Group of Restaurants (JGOR) and Perpetual (Asia), the trustee of BIF.

JGOR and Perpetual (Asia) will hold stakes of 30 per cent and 70 per cent in the special purpose vehicle, respectively.

Perpetual (Asia) currently holds the property under a lease from JTC Corporation. The property’s leasehold land tenure of 30 years commenced in June 2007, with the option for renewal for another 30 years.

The special purpose vehicle will be granted an option to acquire the leasehold interest in the 26 Tai Seng Street property after the assignment prohibition period imposed by JTC ends on Apr 10, 2033.

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Boustead shares ended Monday 0.5 per cent or S$0.01 down at S$1.82, before the news; Jumbo Group shares finished the day 1.7 per cent or S$0.005 up at S$0.30.