Retail investors hunting for high-yield returns have rushed to buy initial public offering units of the Impact Growth Real Estate Investment Trust (REIT), resulting in a four-fold oversubscription.
There were long queues at branches of Kasikornbank (KBank) yesterday, the final day to buy units of the country's first-ever REIT.
Impact Arena, Exhibition and Convention Center is an underlying asset of the Impact Growth Real Estate Investment Trust, the country’s first-ever REIT.
Retail investors who had been offered 120 million units oversubscribed by four times, a source at a joint-lead arranger said.
The Impact Growth REIT allocated 1.48 billion units through the IPO with a price range of 10.30 to 10.60 baht to raise 15.2 to 15.7 billion baht.
Of the total units, 741.25 million were offered to Impact Exhibition Management, a unit of SET-listed Bangkok Land; 350 million to institutional investors; 221.25 million to patrons of the REIT's arranger; 50 million to Impact Exhibition's patrons; and 120 million to retail investors, according to a filing to the Securities and Exchange Commission.
Proceeds from the REIT's offering will be used to acquire freehold assets of Impact Exhibition's Muang Thong Thani project.
The fund is managed by RMI Co, a REIT management firm owned by Impact Exhibition, and its return is estimated at 6.6% to 6.8% in the first year.
The REIT has a dividend payout policy of at least 90% of net profit each year. It will start trading on the Stock Exchange of Thailand on Oct 1.
Kasikorn Asset Management is the REIT's trustee. Financial advisers and joint lead arrangers are Maybank Kim Eng Securities (Thailand), KBank and Kasikorn Securities.
Orawan Ruangsooksriwong, 45, rushed to the KBank branch in Chamchuri Square yesterday morning after learning about the subscription period from a friend.
She requested a subscription for 30,000 units.
"I'm interested in the REIT because it's expected to give higher returns than bank deposits," Ms Orawan said.
She said she hoped to earn a 10% return from her investment. The 10% is expected to derive from dividend and capital gain.
Ms Orawan is not a novice investor in mutual funds, as she once bought units of an infrastructure fund before selling them after their prices slipped below the IPO price.
In the meantime, Impact Exhibition managing director Paul Kanjanapas said proceeds from the company's asset sales to the REIT would be used to build a 700-million-baht hotel and 300-million-baht car park.