Ticon Freehold & Leasehold Real Estate Investment Trust (TREIT) has recently invested in high quality assets with a total value of Bt90 million from Star Micronics.
In a press release issued on Thursday, the company said the assets being bought are located in one of Thailand’s strategic locations for industrial operations with immediate long-term tenancy for 10 years. This is the first sale-and-leaseback from the non-Ticon group assets.
The company said the move coincides with TREIT’s growth strategy, in which its investment is widely open to high-quality properties from both TICON and non-TICON companies throughout the country and abroad.
The company is confident that TREIT will grow by more than 3.6 billion this year and provide target returns to its unit holders, reaffirming TREIT’s status as the largest industrial REIT in Thailand.
Peerapat Srisukont, managing director of TICON Management (TMAN) as the REIT manager of TREIT, said: “In line with the growth plan announced, TREIT consistently pursues investment opportunities in high-quality assets in Thailand and abroad, targeting at a continued growth of between Bt2 billion and Bt3 billion in net asset value per annum.
“Most recently, TMAN’s board has passed a resolution for TREIT’s additional investment plan to acquire real estate assets from Star Micronics Precision (Thailand) Co., Ltd. (Star Micronics). Valued at Bt90 million, this transaction will be paid with TREIT’s working capital. The ownership of properties involved is comprised of land with total area of 8 rai, 3 ngan and 53 square wa and two ready-built factory buildings with a usable area of 8,976 square metres.
“These properties are located in Rojana Ayutthaya Industrial Park in Ban Chang Sub-district, Uthai District, Phra Nakhon Si Ayutthaya Province, one of Thailand’s strategic locations for industrial operations. Moreover, Star Micronics as a seller will sign a 10-year leaseback agreement and continue to occupy the properties as a long-term tenant of TREIT”
The company said that after the investment, TREIT’s assets under management has increased to 516 units of factory and warehouse buildings, divided into 70 per cent freehold and 30 per cent leasehold properties. These high-quality properties are strategically located in key industrial regions of Thailand, such as Ayutthaya, Pathum Thani, Samut Prakan and the Eastern Economic Corridor (EEC).
They were acquired complete with tenancies of world-class companies from various industries, including next-generation automobiles, logistics and electronics. As at the end of September 2018, the occupancy rate stood at 79.2 per cent. On progress of another transaction involving acquisition of real estate assets worth Bt3.6 billion from TICON, the ownership transfer is currently underway with completion expected in December this year.
Peerapat added: “As the REIT manager, we found this new investment worthy and foresaw its potential to contribute to overall growth of TREIT, an investment in high-quality properties in a promising location, coupled with advantages of a sale-and-leaseback deal with non-TICON partner for the first time, especially with a long leaseback period of 10 years from October 1, 2018, to September 26, 2028.
“Looking forward, we are ready to drive further growth of TREIT, to boost its revenues and to ensure high and consistent yields to the unit holders. We expect TREIT’s net asset value to reach Bt35 billion by the end of this year, an increase of 15 per cent from the end of December 2017.”