DTP Hospitality Real Estate Investment Trust (DTPHREIT) was oversubscribed. The overwhelming response of ultra-high-net-worth investors is attributable to its high potential of underlying assets to make a steady yield return and the assets buyback option, says DTPRM, the real estate investment trust management under DTGO Prosperous.
DTPRM also aims to buy more assets for DTPHEIT and to launch a new REIT for general investors in the second and third quarters of 2023.
Ms Wanida Suksuwan, Managing Director of DTP Global REIT Management (DTPRM), a trust management company under DTGO Prosperous (DTP), said: "DTP Hospitality Real Estate Investment Trust, or DTPHREIT, offered units on 19-23 September 2022 and received a great market response, mainly from ultra-high-net-worth investors subscribing through Yuanta Securities and Daol Securities. Institutional investors were also interested in subscribing, reflecting their confidence in the property's potential.
The oversubscription reflects the high quality of the assets and their former owner MQDC's commitment to buy them back at the end of the 3rd year from the fund's closing date. Also, the trust offers investors a high return of 7% per year.
DTPHREIT had a project value of 4,107 million baht after unit sales closed on 28 September. The fund has invested in MQDC hotels and serviced apartments in high-potential locations: 1. Waldorf Astoria Bangkok hotel sub-leasehold and leasehold rights, 2. Magnolias Ratchadamri Boulevard (MRB) serviced apartments, including sublease rights, 3. U Khao Yai hotel.
DTPHREIT is a buyback REIT with an agreement to sell the property back to the original owner at the end of the third year at the price the REIT paid at investment.
"The company thanks investors for their highly positive response and interest in DTPHREIT. The sponsor has an agreement to buy back the property and rent it back from the REIT at a fixed annual rate for all three projects of about 217.49 million baht. DTPHREIT, therefore, has a steady income and unitholders gain an attractive fixed-rate return of 7% per annum, paid quarterly over three years," said Ms Wanida.
DTPHREIT is not listed on the stock exchange as an offering provided to institutional and ultra-high-net-worth investors. If unitholders want to sell out, they can contact distributors such as Yuanta Securities (Thailand) and Daol Securities. (Thailand), a secondary market.
"DTPHREIT's excellent response shows the market's confidence in MQDC. The sponsor, therefore, aims to offer more assets to set up more trusts. We aim to expand DTPHREIT and issue a REIT buyback fund for general investors, widening opportunities and providing an investment alternative. This expansion and launch are expected in the second and third quarters of 2023, with potential investments in commercial and hotel assets," said Ms Wanida.
DTPHREIT's assets have exceptional locations and quality and hold future value for MQDC. Further investments will also be in the outstanding assets, she said.