Investment trust seeks funds for right to operate hotels

Real Estate December 07, 2017 19:11

By The Nation

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The Strategic Property Investors Co Ltd (SPI) has launched the Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT) to raise up to Bt3.740 billion to invest in renewable rights to operate and lease three quality hotels in Indonesia and Vietnam



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The highlight of SHREIT focuses on independent professional management of the three-star to five-star hotel properties in order to seek maximum returns for investors, according to a Thursday press release from the company. These hotel properties all carry strong growth potentials because they cater to specific target groups including tourists, businessmen and domestic consumers at a time when the domestic economy and tourism industries in the region are booming, the release said.

James Lim, executive director of SPI, said that the company is an “independent REIT manager” which is managed by professionals with extensive experience and direct expertise in the management of hotel properties. It also has the backing of a global network, said Lim.

He said that SPI has an independent investment policy which enables it to invest in any suitable properties from any sellers.

Artapong Porndhiti, executive vice president, Investment Banking 2, Siam Commercial Bank, in his capacity as financial advisor said that SHREIT is managed by an independent REIT manager which is a new management model for Thailand, but one widely practiced in Singapore. This management model creates flexibility to invest in additional new properties and therefore the REIT can continue constant growth, he said in the press release.

He said the properties that SHREIT is investing in are quality hotels located in important economic zones which have high growth rates and strong economic fundamentals that will support the property’s performance. Moreover, SHREIT presents a good opportunity for Thai investors to invest in foreign hotel properties to diversify risks as against REIT investment in hotel properties at present which are limited to Thai properties only.

Veena Lertnimitr, executive vice president, primary distribution, Siam Commercial Bank, in her capacity as financial advisor and underwriter said that the total outlay of SHREIT would not exceed Bt5.420 billion which will include the subscription of Trust units with combined value of no more than Bt3.740 billion, plus another Bt1.680 billion in borrowings from financial institutions.

She said in the press release that the estimated returns are in the range of 7.67 per cent to 7.72 per cent annually as disclosed in the prospectus. The subscription will be offered to business partners, parties related to the REIT manager, institutional investors, foreign initial purchasers, patrons of the underwriters as well as general investors.