Bangkok--22 Aug--i2C Communications
TREIT, declared to become the first REIT in Thailand to raise funds by issuing debentures, as it is going to seek approval by the unitholders to make an IPO of debentures worth THB 1.470 billion to finance investments in the second lot of additional properties. It noted dividend payments at THB 0.3502 per unit in aggregate over the first half of the year, and expressed confidence that high quality warehouses and factories for rent will remain in great demand among business firms in various industries.
Mr Peerapat Srisukont, Managing Director, TICON Management Company Limited (TMAN), the manager of TICON Freehold and Leasehold Real Estate Investment Trust (TREIT), revealed the plan to secure approval from the unit holders, at the unit holders' extraordinary meeting on 22 September, 2016, for a proposed public offering of debentures worth up to THB 1.470 billion to finance investments in a second lot of additional properties, and up to THB 1.819 billion to finance loan repayments and/or future investments.
"The target properties (valued up to THB 1.470 billion) include (i) freehold interests in land and three warehouse buildings (12 units) of TICON Logistics Park Company Limited (TPARK) within TPARK Laemchabang 2, TPARK Sriracha and TPARK Rojana Prachinburi; (ii) leasehold interests in land and four warehouse buildings (8 units) in TPARK Bangplee 3; and (iii) freehold interests in land and eight factory buildings of TICON Industrial Connection Public Company Limited (TICON) within Bangpoo Industrial Estate, Hi-tech Industrial Estate, Amata City Industrial Estate and Rojana Industrial Park, Ayutthaya. They are located in Sriracha, Laemchabang, Prachinburi, Bangplee, Bangpoo, Bangpa-in, Rayong and Ayutthaya, all of which are Thailand's major economic and investment hubs with high growth potential," Mr Peerapat said."
TREIT will be the first real estate investment trust, or REIT, in Thailand to raise funds by issuing and offering debentures in the fixed-income market. The debt financing will offer lower interest costs compared to bank loans, which will enhance the REIT's long-term capacity to generate returns to the unitholders.
"TREIT will grow through investments in not only TICON Group's properties but also non-TICON assets. TMAN will actively and constantly pursue new opportunities for investments in properties both locally and abroad. We are confident that supplying warehouses and factories for rent is a growing business, as the formation of the ASEAN Economic Community (AEC) and Thailand's strategically central location in the fields of manufacturing and logistics in the ASEAN region are attracting international investors' interest in making business investment and expansion projects in Thailand, and are creating more demands for high quality ready-built warehouses and factories for rent. Given such environment, its access to and management of such properties will bring significant returns to the unitholders," Mr Peerapat concluded.
As for the Q2/2016 results, TREIT's net asset value grew by THB 191.64 million, or THB 0.3381 per unit. The board approved payment of dividends for the period 1 April to 30 June 2016 at THB 0.1702 per unit on 5 September 2016. Over the past six months, dividends have been paid out at THB 0.3502 per unit in aggregate.
Currently, TREIT invests in 98 units of TICON warehouses and factories for rent, which have a total leasable area of 369,705 sq m and are built on land with a total area of 503 rai (201.2 acres). They consist of 71 units of warehouses (total leasable area: 293,805 sq m, or 79%) and 27 units of factories (total leasable area: 75,900 sq m, or 21%). Freehold investments represent 56%, and leasehold investments 44%. Most lessees are leading Thai and international firms in different industries, eg logistics, consumer products, automotive parts, electronics, etc.