SCCP REIT woos investors with mixed holdings plan
SCCP REIT has revealed that two-thirds of the proposed Bt7.5-billion Thailand Prime Property real estate investment trust (TPRIME REIT) will be mixed with freeholding, improving its chances of yielding more benefits.
“The trust is strategically set up with a combination of freehold and leasehold properties, which will help reduce the risk for unit holders from leasehold,” said Suchard Chiaranussati, director of SCCP REIT as the manager of TPRIME REIT.
He added: “Unit holders will gain benefits from freehold, the value of whose assets will continue growing in line with market price.”
SCCP REIT filed an application with the Securities and Exchange Commission to launch an initial public offering of TPRIME REIT last month. Kasikorn Asset Management was appointed as trustee and Grant Thornton Services appointed as financial adviser.
TPRIME REIT plans to raise not more than Bt5.47 billion from investors and borrow a long-term loan of not more than Bt2.15 billion depending upon the SEC’s approval by this year. Thereafter, the trust is expected to list on the stock market.
Proceeds from the fund-raising will be used to invest in freehold of Exchange Tower and leasehold of Mercury Tower building, including land, with combined investment not exceeding Bt7.22 billion.
Suchard also claimed that TPRIME REIT was the first trust run by a professional, not a family-owned business. Both buildings are located in Bangkok’s central business district and connected to the BTS Skytrain and MRT subway, as the trust’s strong point.
They are also A-grade office buildings with an unlikely drop in take-up rate caused by limited supply, he said, adding that the yields from the rentals would be distributed continuously.
Normally, A-grade office buildings rent out in a range of between Bt800 and Bt1,300 per square metre per month.
Exchange Tower, which is located on Sukhumvit Road adjacent to MRT Sukhumvit Station and BTS Asoke Station, has a total leasable area of 42,887 square metres with occupancy rate of 98-99 per cent. The rental rate is an average of Bt725 monthly per sqm.
Mercury Tower, also an office building, is located on Sukhumvit Road, next to BTS Chidlom Station. It has an occupancy rate of 95-96 per cent on 24,765 sqm of leasable space with an average rental rate at Bt900 monthly per sqm.
In addition, tenants of both buildings are diversified and the largest tenant accounted for not more than 10 per cent of total leasable space, said Suchard.
Subscription to TPRIME would focus on specific private placement to institutional investors such as insurance firms, asset management firms, educational institutions, and large corporations.
Suchard also handles the US$3.2-billion JPN Hotel REIT, which was set up six years ago with asset value of US$200 million, and US$1.9-billion Recap1234 opportunity fund in Singapore under the management of his companies.
