Impact to fund new projects via REIT
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IMPACT Exhibition Management, a subsidiary of Bangkok Land, plans to mobilise Bt8 billion to Bt9 billion from Thailand's first real estate investment trust, the Impact Growth REIT, to construct new accommodation to prepare for the influx of exhibitors exp
The projects will include a three-star hotel costing Bt700 million at Impact Muang Thong Thani.
Impact yesterday announced its readiness to launch an initial public offering of the Impact Growth REIT with underlying value of up to Bt20 billion. It will acquire freehold assets of the Impact Muang Thong Thani project including Impact Arena, Impact Exhibition Centre, and Impact Forum. The REIT will represent about 20 per cent of total assets, or Bt4 billion worth.
Impact will hold 50 per cent of the total IPO units, meaning Bt8 billion worth will be offered to both institutional and retail investors.
The yield for investors for the first year from the REIT is expected to range from 6.6-6.84 per cent.
Paul Kanjanapas, managing director of Impact, said the proceeds from the REIT would support a Bt300-million investment in parking to serve an additional 2,000 vehicles, a three-star hotel and a shopping mall. The cost of the mall has not yet been finalised.
The company is renovating Halls 1-8 at Impact Muang Thong Thani at a cost of Bt200 million, bringing them up to the same standard as Challenger Hall, in a bid to boost occupancy.
The occupancy rate at Halls 1-8 is currently 40-50 per cent, lower than Challenger Hall’s 60 per cent.
The overall occupancy rate at Impact Muang Thong Thani is 50 per cent, and the company wants to boost that to 60 per cent within two or three years.
Paul said the company expected annual revenue growth of 8-10 per cent after renovating the exhibition halls and adding new accommodations. Impact’s annual revenue growth for the past five years has averaged 9 per cent.
Impact raises its rental charges every two or three years.
It reported revenue for its 2013 fiscal year (ended March 31, 2014) of Bt2.4 billion against Bt1.9 billion in the previous fiscal year.
The IPO subscription will run from September 8-12, with the prices ranging from Bt10.30-Bt10.60 per unit. The Impact Growth REIT is expected to mark its first trading day on the Stock Exchange of Thailand on October 1.
Anant Kanjanapas, chairman and founder of Bangkok Land, said the company planned to establish an entertainment complex at Muang Thong Thani as it foresees the AEC driving the MICE (meetings, incentives, conferences and exhibitions) industry.
Paul said Bangkok Land was closing a deal to sell a 60-rai (9.6-hectare) land plot on Srinakarin Road to a British international school, with the price per rai at more than Bt10 million. This deal is expected to be completed in the next one or two months.
After that sale, Bangkok Land will continue to hold 1,000 rai.
Teeranun Srihong, president of Kasikornbank, which is a joint lead arranger of the offering, said that from 2015-16, the bank expected to see REIT offerings worth more than Bt100 billion.
