Bangkok--9 Jan--MT Multimedia
AIM Industrial Growth Freehold and Leasehold Real Estate Investment Trust (AIMIRT) has set its First Trading Day on the Stock Exchange of Thailand today (9 January 2018) with confident that AIMIRT's initial assets, cold storages and warehouses from JWD Group and TIP, will deliver outstanding performance supported by its 100% occupancy rate. AIMIRT targets its first-year return at approximately 7.38% or 0.7377 baht per unit from the initial assets investment and expects to expand its investment portfolio in the future to increase overall return to unitholders.
Amorn Chulaluksananukul, Chief Executive Officer of AIM REIT Management Co., Ltd., the REIT Manager of AIM Industrial Growth Freehold and Leasehold Real Estate Investment Trust ('AIMIRT'), stated that he is confident that AIMIRT will generate consistent returns on investment after its first day of trading in the Stock Exchange of Thailand today. He believes that the initial investment in the cold storage and warehouse facilities will continue to show good performance in the long run.
AIMIRT's initial investment includes:
- Freehold right (ownership) of land, cold storage buildings and movable assets in Pacific Cold Storage Project, located in Mahachai, Samut Sakhon Province
- Freehold right (ownership) of land, cold storage buildings and movable assets in JWD Pacific Project, located on Suwinthawong Road, Chacheongsao Province
- Freehold right (ownership) of land and warehouse building in Datasafe Project on Suwinthawong Road, Chachoengsao Province, of JWD InfoLogistics Public Co., Ltd. or 'JWD Group'
- Freehold right (ownership) of land and warehouse building in TIP 7 Project of TIP Holding Co., Ltd. or 'TIP' in Bangpli, Samut Prakan Province
The initial investment comprises of 9 units of cold storages and warehouses with total leasable area of approximately 58,559 square metres. The cold storages and warehouses of JWD Group and TIP are located in distribution areas of seafood and processed food industries and considered one of most important strategic locations in Thailand for logistics and industrial development. AIMIRT's initial investment is worth a total of 2.14 billion baht, with 1.55 billion baht coming from sales of trust units and 590 million baht in debt financing from financial institutions. Furthermore, AIMIRT targets to invest in additional assets in the future to increase the size of REIT and overall return to unitholders.
"AIMIRT is the first REIT set up and managed by AIM REIT Management Co., Ltd., an independent REIT manager not related to the asset owners, resulting with transparency and accountability at all stages of its operation. It is also Thailand's first REIT to invest in cold storage which is a good alternative for investors. AIMIRT also have option to buy or lease additional cold storage in JWD Pacific Project with an estimated leasable area of 2,800 square metres. Moreover, within five years from the date of assets transfer, if TIP should want to sell, dispose of, transfer or lease out to any REIT, it will have to make the offer to AIMIRT first." Mr Amorn said.
Thitawat Asaves, Executive Vice President of Bank of Ayudhya Public Co., Ltd, as joint financial advisors said AIMIRT is the first REIT in Thailand to invest in cold storage facilities that have a great location in Mahachai, a centre of the cold storage industry. The cold storage facility of JWD group is also the first in Mahachai to receive the MSC Certificate (Marine Stewardship Council), a recognised standard in sustainable fishery, testifying to the sense of responsibility of all parties involved in the process. It helps lessen the effect from IUU Fishing (Illegal, Unreported and Unregulated Fishing) and consequently improve the demand from seafood exporters in using cold storage service.
For TIP warehouses, they are located on the road running parallel to the Suvarnabhumi irrigation canal at kilometre marker 19 of the Bang Na-Trat road in Samut Prakan province, a key centre for industrial production and transport in Thailand, which is close to Suvarnabhumi airport and the Laem Chabang deep-sea port. TIP has expertise and experience in the business of developing and managing rental warehouses and factories for over 20 years and considered one of the three largest developers in eastern Bangkok [information from a market research report by CB Richard Ellis (Thailand) Co., Ltd.: CBRE]. The tenants are well-established leading companies, both domestic and international, with balanced diversification of industries.
According to the distribution policy, AIMIRT will pay dividend in quarterly basis with distribution of not less than 90% of the adjusted net profit of such fiscal year. The estimated return on projected income statement of AIMIRT for a 12-month period (1 Jan – 31 Dec 2018), audited by Grant Thornton Co., Ltd., a certified auditor, is approximately 0.7377 baht per unit (assumed unit price of 10 baht per unit) or approximately 7.38%. It is believed that AIMIRT will be able to generate satisfaction returns consistently over a long period and will be an interesting alternative investment amidst current low interest rate environment .
Montree Sornpaisarn, Chief Executive Officer of Maybank Kim Eng Securities (Thailand) Public Co., Ltd., as joint financial advisors and co-underwriters said AIMIRT's strength is that its initial investment has been made on 100% freehold basis where the risks are appropriately diversified over two types of assets; cold storage and warehouse. It is estimated that in 2018, about 65% of AIMIRT's total revenue will come from cold storage while the remaining 35% will be from warehouse. Furthermore, JWD Group has also signed agreement to lease back cold storage and warehouse facilities from AIMIRT for at least 10 years to operate its business as a service provider. Rent will be increased every three years under the agreement. Additionally, TIP has agreed that if actual revenue from TIP assets is lower than expected, it will compensate the difference on a quarterly basis for three years, starting from the day ownership transfer is registered. This could help stabilize the revenue steam of the REIT.