Bangkok--22 Dec--MT Multimedia
SRIPANWA trust units will begin to trade on SET starting 23 Dec, after offering units for subscription at THB 10.80 each to SPWPF unitholders, Sponsor's (and Sponsor's connected parties') and Underwriter's patrons and institutional investors. The investment returns are believed to be attractive compared with those from government and corporate bonds, driven by the properties' excellent location, service reputations and unique quality, as well as by projected growth in the hotel sector and future infrastructure investments in Phuket.
Ms Veena Lertnimitr, Executive Vice President for Primary Distribution, The Siam Commercial Bank Public Company Limited, as the Financial Advisor and the Lead Underwriter of Sri panwa Hospitality Real Estate Investment Trust, or SRIPANWA, revealed that the first trading day for SRIPANWA trust units will be on 23 Dec, after drawing healthy interests from unitholders of Sri panwa Hotel Property Fund, or SPWPF, and Sponsor's (and Sponsor's connected parties') and Underwriter's patrons and institutional investors, who subscribed trust units at THB 10.80 each, and after swapping SPWPF's assets and liabilities with SRIPANWA trust units as part of the conversion of SPWPF into SRIPANWA. At the par value of THB 11.3121 per unit, the net asset value of SRIPANWA is THB 3.157 billion.
SRIPANWA is the first real estate investment trust (or REIT) to be converted from a property fund. The purpose of its conversion from SPWPF is to facilitate acquisition of new assets or increase the size of its asset portfolio, to enhance returns and liquidity. The properties include (i) the initial asset from SPWPF, which is the Hotel Phase I, consisting of 45 luxurious Pool Villas and luxurious Pool Suite East units, each with their own swimming pool; and (ii) new assets, which include i) the Hotel Phase II, consisting of 30 rooms in the two luxurious buildings of the Habita; and ii) the resort home X29, a three-level resort home, altogether on a plot with total area of 6 rai and 50.6 square-wah (approximately 2.4 acres) in Phuket, a world-class resort town.
"We trust that the listing of SRIPANWA will be warmly welcomed, given the freehold property's superb location, with only 15km distance from the town area, which offers great potential for capital appreciation. SRIPANWA is also well known for excellent service and highly competent and experienced management. It will generate decent and constant returns from rental revenues, which will continue to increase. The rate of returns will be attractive compared with those returns from investments in government, corporate bonds, other REITs or property funds investing in similar assets. At the subscription price of THB 10.80, the expected first year yield is 6.75%," she said.
Mr Vorasit Issara, Chairman of Charn Issara REIT Management Co Ltd, as the Settlor, REIT Manager and the Issuer of trust units, added that the company sees in SRIPANWA's assets great potential for attracting high-end tourists. Especially, he noted, the 30 Pool Suite and Penthouse units, part of the new assets and all of which offer a view of the Andaman sea, are selling at lower average room rates compared with the initial asset allowing SRIPANWA to capture wider customer base.
Sri panwa Management Co Ltd, or SPM, which will be the tenant of the initial asset and the new assets, is a member of Charn Issara Development Group that has more than 27 years' experience in property development. As a result, SPM is fully familiar with and has an in-depth knowledge of Sri panwa. The past five years' performance of the initial assets has been increasing at the rate of 13% per annum.
SRIPANWA also benefits from the booming hospitality industry and future infrastructure projects in Phuket, with the previous year's occupancy rate for five-star hotels on the island jumping to 71% (2014: 69%). For 2016, the rate is expected to rise to 75% due to an increase in the number of tourists and government promotion campaigns. As for infrastructure projects, the Thai government is going to build, for example, the second expansion of Phuket International Airport to increase passenger capacity from 6.5 million to 12.5 million per year, as well as a monorail network linking Tha Nun, the airport and Chalong intersection (expected to begin construction in 2017), which will boost Phuket's hospitality and tourism industries in the long term.