Impact II properties to join assets of Thailand's first realty investment trust

Bangkok Land, the owner of Impact Exhibition Management Co, plans to add properties from Impact II, which will start construction in the first quarter of next year, to its real estate investment trust.

Impact will launch the country’s first such trust, the Impact Growth REIT, with a total of Bt20 billion in the fourth quarter of this year. Funds from the REIT will be using for the construction of Impact II on a lakeside plot near the existing Impact Muang Thong Thani, said Anant Kanjanapas, chairman of Bangkok Land.

He said Impact II would cost between Bt30 billion and Bt40 billion to construct over 18-24 months.

Montree Sornpaisarn, chief executive officer of Maybank Kim Eng Securities (Thailand), the financial adviser to Impact, said the Impact Growth REIT was a freehold trust using Impact Muang Thong Thani properties as underlying assets. They include Impact Arena, Impact Exhibition Centre, Impact Forum, P2 Parking building and Impact Challenge.

Montree said he was unable to reveal the expected the return from Impact Growth REIT until the Securities and Exchange Commission approves the filing. However, the average return of freehold funds in the past was 7 per cent per annum.

Anant said Bangkok Land would mobilise Bt10 billion from the REIT as it intends to hold 50 per cent of total units sold to the public for no less than five years.

The company has cash flow of Bt20 billion and additional revenue from land sales, enough to support the cost of Impact II. Bangkok Land has no plan to unload Impact from its assets because it is its main money-maker, he said, noting that the company wanted to expand Impact as a fully integrated exhibition and convention to serve the upcoming Asean Economic Community.

Anant added that the total space of Impact and Impact II would be extended to 250,000 square metres from 140,000sqm currently.

The Impact II will be on a 500-rai (80-hectare) plot and will include a convention centre, a 640-room hotel, a shopping mall and condominiums. 

 

Revenue to double 

Anant said Bangkok Land would eventually see its revenue more than double after Impact II is completed. After the new facility can generate stable income, the company plans to add its assets to the REIT, pushing it to Bt50 billion. 

Impact recorded revenue of Bt2.4 billion and earnings before interest, taxes, depreciation and amortisation (EBITDA) of Bt1.08 billion for the fiscal year 2012 ended this March. In the current fiscal year, the company projects revenue of Bt2.5 billion to Bt2.6 billion and EBITDA of Bt1.2 billion, said Paul Kanjanapas, managing director of Impact.

Kasikornbank, which is co-financial adviser to Impact Growth REIT, expects to launch four or five REITs next year, totalling Bt20 billion to Bt30 billion, said president Teeranun Srihong.