BANGKOK -- Property developer Bangkok Land is set to list Thailand's first real estate investment trust on Oct. 1 after an initial public offering next week.
Although the schedule for the listing was set back nearly a year by political unrest, the company is confident of attracting local investors and raising funds for further expansion.
Impact Growth REIT will own freehold assets at the Impact Muang Thong Thani Project, Asean's largest convention and exhibition complex covering over 122,165 sq. meters on the northern outskirts of Bangkok. The IPO, to which local general investors can subscribe from Sept. 8 to 12, is valued at up to 20 billion baht ($626 million). Foreign funds may not apply.
"The Impact Growth REIT matches my ambition to develop the most luxurious convention and exhibition center in the world," Bangkok Land Chairman Anant Kanjanapas said at a press conference in Bangkok Wednesday, as he unveiled plans to expand the existing complex by adding hotels, entertainment facilities and retail areas. Cash raised through the REIT will help finance these projects, he said.
Maybank Kim Eng Securities (Thailand), Kasikornbank and Kasikorn Securities are the financial advisors and joint-lead arrangers for the offering. Investors will be paid at least 90% of the REIT's net profit per year, the companies said. The estimated return rate in the initial year is to be between 6.60-6.84%.
Other developers are expected to follow suit on the investment model. Warehouse developer WHA Corp., for example, has announced plans to establish a REIT to finance expansion.
Kasikornbank President Teeranun Srihong predicts the REIT market in Thailand could grow to around 100 billion baht by next year. He expects REITs to be well accepted by local investors as "the returns are more attractive than rates of bank deposits".
Currently, real estate fundraising is usually done through property funds. The trust structure of REITs allows investments in multiple properties and more management flexibility. REITs are widely expected to take over from conventional property funds.
The Impact Growth REIT is one of the 10 largest REITs in terms of transaction size, according to Montree Sornpaisarn, Maybank's CEO in Thailand. Among Asean countries, Singapore and Malaysia already have REITs listed on their bourses.