Bangkok--9 Aug--Medea Planner Consultants
HREIT Plans to Increase its Capital for Investment in Additional Assets of not exceeding THB 1.69 Billion by the end of 2017.
Hemaraj REIT Management Co., Ltd., the REIT Manager of HREIT announces reimbursement of excess liquidity from operation with THB 0.1862 per unit by capital reduction (XN, 18 August 2017). Ms. Kanchana Ouaoborm, Managing Director unveiled the plan on the additional investment asset to invest in 30-year leasehold rights for ready-built factories and ready-built warehouses, with the right to extend for another 30 years, totaling 60 years. The additional investment assets will not be exceeding THB 1.69 billion with the capital increase. And it is expected to be completed by the end of this year, accelerating HREIT assets growth to almost THB 10 billion.
Ms. Kanchana Ouaoborm, Managing Director of Hemaraj REIT Management Co., Ltd., the REIT Manager of HREIT, said, on 8 August 2017 the Board of Director meeting has reviewed the Q2/2017 performance and approved reimbursement of excess liquidity from operation with THB 0.1862 per unit by capital reduction which total amount THB 106.06 million (XN, 18 August 2017). This will result in a total of dividend and capital reduction payment to Trust Unitholders at THB 0.4509 per unit since the beginning of the year.
HREIT's Q2/2017 performance, as of 30 June 2017 without effect from unrealized loss from investments valuation, posts THB 106.06 million net investment income. Combining with the Q1/2017 figure, the net investment income totals THB 212.40 million. The occupancy rate of Q2/2017 is 80.53%, up 1.14% from Q1/2017. Besides, Hemaraj has compensated income for vacant units, which makes HREIT earns 100% of occupancy rate for 3 years, starting from its initial investment until period ending Q4/2019. The actual occupancy rate is expected to be in the same trend with Thai economy that improving in positive way.
Managing Director of Hemaraj REIT Management Co., Ltd., the REIT Manager of HREIT, added, "the capital reduction is because of HREIT excess liquidity from operation and non-cash expense, which results from the difference between accounting entry from its initial investment value and the latest asset appraisal value reviewed by an independent appraiser. For the reimbursement of excess liquidity from operation by capital reduction, Trust Unitholders will receive capital reduction payment in cash, as same as dividend payment. Unlike the dividend, the proceeds from capital reduction will not be subject to 10% withholding tax. Since the beginning of this year, HREIT has paid a total of THB 0.4509 per unit through dividend and capital reduction to Trust Unitholders.
For the progress of HREIT's first capital increase for investment in additional assets, with the assets value of not exceeding THB 1.69 billion, HREIT will invest in 30-year leasehold rights for ready-built factories and ready-built warehouses, with the right to renew for another 30 years, totaling 60 years in 5 projects i.e. Eastern Seaboard Industrial Estate (Rayong) (ESIE), Hemaraj Eastern Seaboard Industrial Estate (HESIE), Hemaraj Saraburi Industrial Land (HSIL), Hemaraj Chonburi Industrial Estate (HCIE) and Hemaraj Logistics Park 4 (HLP4). An additional leasable area accounts for approximately 55,131 square meters with 100% occupancy rate at present. HREIT has already submitted its filing application to the Office of the Securities and Exchange Commission (SEC). The investment in additional assets is expected to be completed within the end of this year and this investment is to increase HREIT's asset value to approximately THB 10 billion.