Bangkok--11 Mar--KAsset
Kasikorn Asset Management and KPN Group Corporation are introducing the KPN Property Fund (KPNPF) to invest in the freehold right of land and building of KPN Tower, where the occupancy rate exceeds 90 percent, with up to four dividend payments per year. The prime location of the building — in the Rama IX area adjacent to the planned MRT Orange Line — ensures promising future returns.
According to Kasikorn Asset Management Executive Chairman Mr. Chongrak Rattanapian, KAsset will introduce the 1.8-billion-Baht KPNPF in March to invest in the freehold right of land and building of KPN Tower, located on Rama IX Road. Unlike a leasehold fund, the freehold fund offers ownership in the assets with no time limit. The building is located on a 2-rai land plot with 60,000 square meters of usable area and approximately 26,000 square meters of rental area. KPN Tower is an outstanding asset located in the Rama IX area with consistent revenues from office rents, having an occupancy rate of more than 90 percent since 2010. The fund revenues are also generated from outdoor media as well as an LED screen on the building which provides beneficial information for commuters on both inbound and outbound roads. The investment value of the fund is likely to be enhanced with satisfactory future returns for those who wish to invest in property assets, given the KPN Tower’s location, a junction connecting present and future transportation networks, together with KPN Group Corporation’s professionalism in property asset management. The fund also offers an opportunity to reap long-term inflation-shielded benefits.
Mr. Kris Narongdej, Chairman of KPN Group Corporation, and manager of KPN Tower, said that the building is in a prime location on Rama IX Road, close to a number of expressways including the Sri Rat (Stage 2) Expressway, Chalong Rat Expressway (Ramindra — At Narong), and expressways connecting to Suvarnabhumi Airport, Bangna and Chonburi. Moreover, the building’s rental income is generated from a diverse group of tenants, both Thai and international, which have rented space in KPN Tower for at least eight years on average. This can assure investors of well-diversified rental revenue sources, preventing income volatility and reducing the risk from dependence on any single tenant. Additionally, KPN Group plans to expand investment into more property projects in the future, for which KPNPF can provide additional investment. KPN Group Corporation also invests in 30 percent of KPNPF’s total value.
For future returns, Mr. Suradech Kietthanakorn, KASIKORNBANK's Investment Banking Business Head, said KPN Tower has high growth potential both in terms of income and future asset value. The rental rates of the building currently average 20 percent lower than those of other buildings nearby, leaving room for rent hikes going forward. KPN Tower is also located on the MRT Orange Line (Taling Chan — Minburi), scheduled to open for service within 2019; in fact, the line’s Pradit Manutham Station is expected to be built close to the building. The building’s location is not only convenient for tenants, but also the key factor that will allow future rent hikes and consequently add value to assets that the fund is invested in.
Investors who are interested in KPNPF may subscribe the fund’s investment units by 50,000 Baht for a minimum investment plus multiples of 1,000 Baht. The fund’s prospectus can be received at any KBank branch. Upon initial public offering and fund registration, KPNPF will be listed on the Stock Exchange of Thailand.