Listed firm WHA Corp, a Thailand-based warehouse developer, plans to raise funds to finance its investment expansion via the launch of its first real estate investment trust (REIT) next year.
The company plans to expand its warehouse space by 167,000 sq m in the fourth quarter, making the total 1.2 million sq m.
WHA Corp president and chief executive Somyos Anantaprayoon said establishing warehouses would be a trend for businesses in the upcoming Asean Economic Community, which would be fully implemented in 2015 and allow a freer flow of trade and investment.
He said WHA Corp built warehouses to suit the needs of its clients, of which 70 per cent were healthcare businesses, with leaseback agreements popular.
He said most warehouses being developed by his company were in Bang Na, which was located near industrial estates, Suvarnabhumi International Airport, Bangkok Port and the container distribution centre in Lat Krabang.
WHA Corp was developing a combined 100,000 square metres of built-to-suit warehouses in Bang Na, and was building a built-to-suit seven-storey office building on Bang Na-Trat Road, which it was slated to deliver in September.
Somyos expects the company’s income to be split equally between rentals and the sale of assets to its existing property fund in the next few years. Currently, the company’s income from rentals was about 30-35 per cent while the remainder was from the sale of assets to the property fund.
Recently the company acquired the Bt2.05-billion Equinox Office Tower, which Somyos said would boost its rental income. The building is located in a prime area – a linkage point between the BTS skytrain’s Mo Chit Station and the MRT subway’s Chatuchak Station.
It has a total leaseable area of Bt21,000sqm. The name of the building has been changed to “SJ Infinit One” and it is slated to open this month and sell 40,000sqm of the building to the REIT.
REIT is permitted for companies that own and, in most cases, operates income-producing real estate.
Somyos said the company was also building a 30,000sqm built-to-suit warehouse in Indonesia.
In the last quarter this year, he said the company planned to sell warehouse properties worth Bt4.7 billion in total to launch the property fund, with it booking a profit margin of 25-30 per cent.
WHA Corp’s current property fund is worth Bt5 billion and is expected to expand to Bt10 billion in December.
Somyos said the company was in the process of filing for the REIT for an office building and it was scheduled to be launched next year after the opening was originally planned for the first quarter this year.
By the end of July, WHA Corp was successful in raising funds through a Bt1.7-billion unsecured debenture issuance, which was rated A- by Fitch Ratings (Thailand) as it has high potential for earnings growth.
The company’s revenue target this year remains at Bt5.5 billion, Somyos said.