Real Estate Trust Fund rules to be ready in 1st half: SEC

The adjusted rules are expected to stimulate fundraising and provide an investment alternative.

SEC secretary-general Vorapol Socatiyanurak said the commission was adjusting the REIT-establishment rules, which are expected to be finalised within the first or second quarters and to come into effect this year.

Currently, only companies owning factories, hotels and department stores can raise money via property funds. Other businesses are not allowed to issue property funds.

REITs will be open to all businesses and follow international standards.

The SEC started adjusting the rules on establishing REITs last year 2011. Finalisation of the rules has been delayed as several rules need further fine tuning.

“After REITs are introduced in the industry, property funds may become less attractive. But the industry will likely be better for both issuers and investors due to REITs’ flexibility and more various asset types, such as hospitals or health-service centres, in the funds,” Vorapol said.

The rule adjustment will allow businesses of any size or type to raise funds through capital markets for expansion.

Renewable-energy businesses, hospitals and health-service centres are key targets of the new rules on issuing REITs due to their large amount of fixed assets.

Another rule adjustment by the SEC would make it easier for holding companies to invest in businesses apart from their core business.

Currently, a holding company is required to have a core business.

Such adjustments will not only give holding companies greater investment flexibility, but also allow them to list on the Stock Exchange of Thailand.