Investment in property funds sees big jump
Investment in property funds soared 36.87 per cent from Bt101.94 billion in 2011 to Bt139.52 billion in 2012, according to the Association of Investment Management Companies.Part of the growth came from six funds launched last year worth Bt32.88 billion.
Return on investment averaged 27.8 per cent, with the Samui Airport Property Fund posting the highest return of 88.56 per cent, followed by the Luxury Property Fund with 81.74 per cent, the Millionaire Property Fund with 67.69 per cent, the CPN Retail Growth Fund with 59.58 per cent and the Prime Office Property Fund with 55.36 per cent.
Stapana Leayparpai, CEO of the association, said last week that most asset management companies had recommended firms to issue property funds last year because the Securities and Exchange Commission will issue rules for establishing real estate investment trusts that will replace property funds next year.
Developers are encouraged to launch property funds before the end of this year to attract investors, as dividends paid out by property funds to corporate and individual investors are not subject to withholding tax.
However, a year after the REIT law takes effect next month, they will be slapped with a 10-per-cent withholding tax.
For better protection of investors, all of a REIT's properties will be held by banks as trustees. Property funds establish a juristic body to guard their properties.
The SEC will ban new property funds once REIT rules are enforced.
Expecting busy traffic until the deadline, the SET is urging developers wanting to take advantage of the current rules to seek free advice and prepare for the launching of their property fund.
At present, 39 property funds are listed with combined market capitalisation of Bt149.28 billion. Among those entering the market is the Tesco Lotus Retail Growth Freehold and Leasehold Property Fund, which has mobilised the biggest-ever amount - Bt18.4 billion.