Ticon set to launch Bt6-bn mutual fund
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Ticon Industrial Connection plans to set up a Bt6-billion mutual fund for property-rental rights to raise money for its future business expansion, managing director Virapan Pulges said.
He said the company was in a process of setting up the Bt6-billion Ticon Industrial Growth Leasehold Property Fund with the Securities and Exchange Commission.
TGROWTH assets will be divided into two parts. The first is investments in 30-year land and building rental rights of 38 factories in five industrial estates, and 43 units of land and warehouses in logistics parks and industrial estates including Amata Nakorn, Pin Thong, Rojana, Hi-Tech and Nava Nakorn.
The second part will be put into two factories and land rights in Amata City Industrial Estate.
Of total fund capital, about 60 per cent will go to warehouses and the remaining 40 per cent to factories. The average rental rate is 95-97 per cent with an average rental-right period of three years. The fund’s asset periods average two years and four months.
“Previously, a real estate investment trust was planned. But the Revenue Department has not yet resolved tax issues [for REITs]. And the company cannot wait, given its investment plan and need for Bt12 billion. Previously, about 51 per cent of a growth fund went to warehouses and 49 per cent to factories. The company will hold 20 per cent of the fund’s units,” Virapan said.
Chotika Sawananon, SCB Asset Management’s managing director, said the growth fund could be established by next month. The fund will Bt450 million to Bt500 million for the second part’s investment next March. The borrowings will have a maturity of 12 years and average minimum lending rate minus 0.5 percentage point. The 7-per-cent rate will boost the fund’s rate of return.
The fund’s strength is prime locations, experienced management and no concentration of rental groups. It mixes two types of assets: warehouses and factories, Chotika said.
“Growth opportunity lies in rises in rental fees. Usually, rental fees for warehouses and factories rise by 3-5 per cent a year on average. Another is increase in assets. If the Revenue Department has a clear solution on taxes and supports the transformation from a property fund into an REIT, the growth fund will be transformed with Ticon as the REIT manager SCB Asset Management as the fiduciary.”
