The Impact Growth Real Estate Investment Trust, the first REIT in Thailand worth 20 billion baht, is ready to launch its initial offering next week and begin trading on Oct 1.
Paul Kanjanapas, managing director of Impact Exhibition Management Co, said the REIT would acquire the freehold assets of Impact's Muang Thong Thani project as its underlying assets, with a transaction size of up to 20 billion baht.
The IPO price ranges from 10.30 to 10.60 baht a unit with a minimum subscription of 2,000 units from Sept 8 to 12.
RMI Co will be Impact Growth REIT's manager and Kasikorn Asset Management Co the trustee.
Financial advisers and joint lead arrangers of the deal are Maybank Kim Eng Securities (Thailand), Kasikornbank (KBank) and Kasikorn Securities.
Impact Muang Thong Thani consists of Impact Arena, Impact Exhibition Center and Impact Forum, with debt of about 20% of its 20 billion baht in asset value.
Maybank chief executive Montree Sornpaisarn said Impact Exhibition Management would hold half the offered units, with the rest going to brokers’ supporters and retail investors.
General investors can subscribe to the units at Kasikorn Securities, Maybank, KBank, Bank of Ayudhya and CIMB Thai Bank.
The final offering price depends on book-building results to be announced no later than Sept 17.
KBank president Teeranun Srihong expects the Impact Growth REIT to receive a strong response from investors due to having similar investment characteristics as property funds.
Anant Kanjanapas, chairman and founder of Impact's parent company Bangkok Land, said the Impact project enjoyed annual revenue growth of 8-10%.
The project is wholly owned by Impact including land and buildings.
"I'm confident the unit holders will receive optimum benefit from continual growth in asset value each year as well," said Mr Anant.
Returns for the Impact Growth REIT are expected between 6.6% and 6.84% in the first year, with future returns in line with property freehold funds.
The REIT will pay out distribution to the trust holders at a rate of at least 90% of the net profit per year.
Mr Anant said Bangkok Land expects to receive 11-12 billion baht from selling assets to the REIT for a net profit of 6 billion.
"We hope to pay dividends to shareholders of about five satang a share from 2015 operations," he said.
Impact's Mr Paul said proceeds from the REIT would be used this year to build a hotel worth 700 million baht and a car park worth 300 million. A shopping mall is also in the works.
Mr Anant said Bangkok Land's assets include 1,000 rai in Phetchaburi province worth 10 million baht a rai.
The company recently signed a deal to sell 60 rai for an international school to be built next year. It is also negotiating the sale of 300 rai to SET-listed Sansiri Plc, with a deal nearly reached.
The rest is reserved for a new commercial project near the Yellow Line high-speed train project the government is expected to announce by November.