Units in property player Sripanwa enjoy lift on Thai market debut

 The market debut followed what the company described as an “enthusiastic welcome” at the subscription price of Bt10.80 per unit. The units closed up at Bt11 in line with a modest rise in the broader market.
That welcome, the company said, came from Sripanwa unit-holders, sponsors and sponsors’ connected parties, the underwriter’s patrons and institutional investors. Siam Commercial Bank was the financial adviser and the lead underwriter.
Vorada Thangsurbkul, first executive vice president for investment banking coverage at SCB, said Sripanwa expected to generate attractive returns from the performance of its assets.
At the par value of Bt11.3121 per unit, Sripanwa’s net asset value is Bt3.157 billion.
Sripanwa is the first real estate investment trust (REIT) to be converted from a property fund. The purpose of its conversion is to facilitate the acquisition of new assets and increase the size of its asset portfolio to enhance returns and liquidity. Its assets include 45 luxurious pool villas and suites, as well as 30 rooms in the two luxurious buildings of Habita. It also has X29, a three-level resort home in Phuket.
“We trust that the listing of Sripanwa will provide a high return in the long run to unit holders, given the freehold property’s superb location, with it only 15 kilometres from the town area [of Phuket], which offers great potential for capital appreciation,” Vorada said.
“At the subscription price of Bt10.80, the expected first-year yield is 6.75 per cent.”
Vorasit Issara, chairman of Charn Issara REIT Management Co, the settlor, REIT manager and issuer of the trust units, added that the company believed that Sripanwa’s assets had great potential, with its management team highly experienced in hotel management.
The new assets, the 30 pool suite and penthouse units, all have views of the Andaman Sea. And along with the private five-bedroom X29, they are expected to attract high-end tourists.
In addition, the assets are expected to have high growth potential, given the booming hospitality industry and future infrastructure projects in Phuket, with the previous year’s occupancy rate for five-star hotels on the island jumping to 71 per cent from 69 per cent in 2014. For 2016, the rate is expected to rise to 75 per cent.
The government plans to add a second expansion to Phuket International Airport to increase its passenger capacity from 6.5 million to 12.5 million per year, which will boost Phuket’s tourism industries.