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Published on October 9, 2007

The Bank of Thailand's capital-control measure has negatively affected property-fund growth this year, which is expected to fall to Bt10 billion from a previous forecast of Bt100 billion.

Association of Investment Management Companies (AIMC) president Maris Tarab yesterday said property-fund growth had been significantly slowed down compared with last year, due mainly to the central bank's 30-per-cent reserve requirement.

Last year, property funds more than doubled, from about Bt20 billion to Bt45 billion. But this year, they are expected to grow only to Bt55 billion.

Property funds issued earlier this year include the Major Cineplex Lifestyle Property Fund, Kasikorn Asset Management's Property Fund and the Ticon Property Fund.

Maris added that if the central bank still maintains the 30 per cent reserve requirement until next year, property funds would hardly grow at all, while property fund managers will have to adjust their strategies by focusing more on local investors.

Meanwhile, the Ticon Property Fund (TFund) yesterday announced a capital increase of Bt1.94 billion after a second round of fund-raising, in order to invest in an additional 47 factories for rent.

Maris, who is also managing director of ING Funds Asset Management (Thailand) and manager of the TFund, said the proceeds from recapitalisation would be invested in 47 factories for rent with a total area of 95,925 square meters and worth Bt.94 billion. Thus, the total number of factories that the fund has invested in has risen to 131, with 286,482 square meters and a combined value of Bt5.78 billion.

The factories are located in such industrial estates as Bang Pa-in, Bang Pu, Rojana, Amata Nakorn, Pinthong and Amata City.

Maris said income from factories for rent was expected to rise continually in line with demand for factory area and economic growth. The trend has allowed the TFund to pay dividends to its unit holders four times a year, with about 8 per cent of annual return, Maris said.

Virapan Pulges, managing director of asset manager Ticon Industrial Connection, said his firm's main customers were auto-parts manufacturers and small and medium-sized electronics enterprises.

Ticon set its income growth for next year at 10-15 per cent from this year's Bt3.3 billion to 3.4 billion, most of which came from the proceeds of the TFund, factories for rent and average returns from the fund.

"The incomes are expected to be on target, because we'll realise revenues from selling Bt600 million worth of factories to the TFund during this fourth quarter, while incomes from rental fees will be Bt680 million to Bt700 million in the same quarter. Thus, the company's net profit this year will be about Bt900 million, up from last year's Bt870 million," he said.

Virapan added that his company had earmarked a Bt2-billion budget to invest in two warehouses that will be completed next year.

Yarnsak Manomaiphiboon, managing director of Bualuang Securities' financial advising and underwriting business, said the TFund would raise funds for the second time by selling 185 unit trusts from next Monday to October 22, half of which will be offered to existing unit trust holders and the rest to the public.

 Siriporn Chanjindamanee

 The Nation