LH sets up Bt3.3bn property fund
Land & Houses Plc's board of directors on Wednesday approved the establishment of Land and Houses Freehold and Leasehold Property Fund, which plans to buy out some residential units from the company at the value of no more than Bt3.3 billion.
The property fund should further boost the company's income. Last year, LH reported the consolidated net profit of Bt5.6 billion, up 41.23 per cent from Bt3.97 billion in the previous year. The net profit was partly driven by the Bt2.49 billion gain from sale of its investment in Bangkok Chain Hospital Plc.
In a filing to the Stock Exchange of Thailand, the country's largest property developer also explained that Land & Houses Fund Management Co Ltd, to manage the fund, should be established before the end of the first quarter. It is waiting for the Securities and Exchange Commission's permission.
The fund will buy residential units of L&H Villa Sathorn from L&H Sathorn Co Ltd, at the value of Bt628 million, the book value as of end-2011.
It will also buy assets from Land and Houses Property and Loan Fund-II, owned 49 per cent by LH, worth Bt2.661 billion. The assets covered Centre Point Sukhumvit-Thong Lor Serviced Apartment Project and Centre Point Residence Phromphong Project to the Fund.
LH will own 15 per cent of the newly-established fund, through the Bt495 million investment. The board also approved the minimum rental income guarantee through end-2015. The guarantee is upto 50 per cent of the fund's actual net profit. The payment would be made when the fund's actual net profit in a year is lower than the minimum guarantees - Bt179.88 million in 2012 and Bt243.16 million in the subsequent years.
