Ticon sells 30% of subsidiary to Mitsui & Co

Mitsui Asia Pacific also plans to invest in the newly formed real estate investment trust – Ticon Real Estate Investment Trust (TREIT) – which is currently under filing with the Securities and Exchange Commission (SEC).

The move will also allow Ticon to extend its partnership with Mitsui in expanding the business into other potential markets particularly in Asean, said Virapan Pulges, Ticon’s managing director.

“We are looking to expand our business [in providing warehouses and ready-built factories for lease] to many potential markets in Asean, especially Myanmar and Indonesia, which are able to give reasonable return on investment to the company,” he said.

Virapan said that such overseas expansion should happen next year. The initial investment required to build a warehouse or factory for lease, occupying average space of between 40,000 and 50,000 square metres, will be about Bt500 million to Bt1 billion.

“We [Ticon] are very excited to welcome Mitsui as long-term strategic partner, which leads to the enhancement of TMAN’s business by utilising the Japanese network. The partnership with Mitsui, a leader in the REIT Management business, especially in industrial and logistic REITs in Japan and Singapore, will be the beginning of more cooperation between the two companies in the future,” said Virapan.

He said that the company is certain that this alliance would enable TMAN to expand its network and help strengthening TMAN’s competitiveness in the global arena. The strategic partnership will enhance TREIT to expand its investment opportunities in many industrial and logistics properties in both Thailand and foreign countries, especially in the high-demand Asean region after integration under the Asean Economic Community (AEC).

Under the AEC, Thailand should relocate labour-intensive facilities to neighbouring countries with lower labour cost. Those parts being produced in neighbouring countries will then move back to Thailand for the assembly of final products.

Kiyoshi Okubo, Mitsui Asia Pacific general manager of the financial and new business department, of innovation and corporate development division, said that it is a good opportunity for the company to invest in TMAN.

“Under the partnership, we will help contribute in developing TMAN’s and TREIT’s potential growth utilising Mitsui’s long experience of logistics and REIT operations. In addition, we expect to further extend business collaboration with Ticon based on Mitsui’s global business network and Ticon’s excellent knowledge and experience in industrial and logistics properties development, and build a long-term relationship with Ticon,” said Okubo.

He said that Mitsui is one of the world’s most diversified comprehensive trading, investment, and service companies and is multilaterally pursuing businesses that range from product sales, worldwide logistics and financing. Mitsui has been in Thailand for a long time, particularly in the industrial and manufacturing sectors.

“The growth of the domestic economy in Thailand as well as the implementation of AEC next year will encourage significant growth in many downstream businesses, particularly consumer products,” he said.

TMAN was founded in 2013 with its main business focus as a REIT management company. TMAN, a subsidiary of Ticon which is Thailand’s leading provider of serviced rental factories and warehouses, was approved to be REIT Manager by SEC on August 6, 2014, which made TMAN the first Industrial REIT management company in Thailand.