TREIT to invest Bt3.35 billion in TICON assets

Investments will reach total asset value of Bt7 billion, keeping TREIT on track for regional growth over four years.

TICON Management Co managing director Amorn Chulaluksananukul, who is also manager of TREIT, said TREIT unit holders had voted to approve additional asset investments – including factories for lease by TICON Industrial Connection (TICON) and warehouses for lease by TICON Logistics Park Co (TPARK) – for a maximum value of Bt3.35 billion inclusive of transaction expenses.

Target assets for this round of investment consist two main categories: 12 units of assets approved previously by unit holders (at the annual general meeting) totalling up to Bt472.29 million, and 41 new units totalling up to Bt2.82 billion.

The assets chosen for this new round of investment are in 11 high-potential strategic locations for logistics and include both freehold and leasehold assets. A total of 82 per cent of the assets are warehouses, and the rest factories.

Once completed, the additional investment will raise TREIT’s total asset value to Bt7.64 billion, with a freehold-leasehold ratio of 61:39.

Amorn said funds for the investment would be raised from issuing up to 241 million new trust units totalling Bt2.35 billion in value, with at least 50-per-cent rights offerings made available to current trust holders and the rest (if any) to the public at the same price.

The price will be indicated by marketing conditions at the time of sale. Furthermore, an additional Bt1.005 billion will be secured through long-term loans from financial institutions.

"The additional investment will not only expand the size of TREIT but will also make it more attractive in the eyes of domestic and international investors," he said. "It will also improve liquidity, while current unit holders will not see any reduction in returns.

"TREIT’s policy calls for at least two dividend payments per year at the minimum ratio of 90 per cent of adjusted net profit, making it a very interesting alternative for [those looking for] consistent returns over the long term."

TREIT’s growth strategy focuses not only on investments in TICON Group’s assets but also those outside the group’s ownership.

"With our active management approach, we continue to find opportunities in domestic and international property markets as well as the possibility to establish REITs [real estate investment trusts] for the other new class of assets. However, our initial focus is on assets in Thailand.

"Given the low savings interest rate, we are confident that TREIT’s investment in high-quality assets and high dividends will garner a warm reception from investors. Our growth plans will march on. The long-term objective is to become a regional-level trust with Bt20 billion in net asset value within four years," Amorn said.