Central Pattana (CPN), Thailand's leading retail property developer, is considering establishing real estate investment trusts (REITs) abroad to help finance business expansion within Asean.
Charamporn Jotikasthira (fourth left), president of the Stock Exchange of Thailand, Chotika Sawananon (centre), the managing director of SCB Asset Management, and Sudhitham Chirathivat (fourth right), executive chairman of the Central Group of Companies, join other executives during yesterday’s launch of the CPN Commercial Growth Leasehold Property Fund.
Naris Cheyklin, the chief financial officer, said countries such as Malaysia and Singapore are friendlier to issuers and investors alike in terms of tax treatment for REITs.
"Our funding plan is consistent with the company's strategy of expanding its business in the Asean Economic Community. Raising funds in foreign currencies to help expand abroad also will help to mitigate currency risks," he said.
Asean members have committed to cutting barriers to the movement of labour and capital by 2015, opening up service industries in a bid to create a single regional economic bloc.
Leading Thai companies such as CPN have been aggressively looking for new expansion opportunities across the region to help take advantage of the larger market.
Mr Naris said if CPN commits to building a new department store or shopping mall abroad from scratch, then it may finish by 2015 at the earliest.
An acquisition, however, would be significantly faster.
"We've made no conclusions yet. We may form a joint venture to build an property abroad or acquire an existing property if the opportunity arises," said Mr Naris, adding that Indonesia is one market being studied.
CPN manages 18 shopping centres, seven office buildings, one hotel and two residential projects nationwide including properties representing one-fourth of Bangkok's retail market.
Mr Naris said expansion into other Asean countries will help to support CPN's retailer clients and expand their presence internationally as well.
CPN now manages two leasehold property funds - CPN Retail Growth (CPNRF), launched in 2005, and CPN Commercial Growth (CPNCG), an office building fund that began trade on the Stock Exchange of Thailand (SET) yesterday.
CPNCG units closed yesterday at 13 baht, up 2.70 baht or 26% from their initial public offering price of 10.30 baht per unit.
A total of 771.7 million units changed hands.
The office building fund will invest in leasehold rights for the land and buildings of the Offices at CentralWorld.
SCB Asset Management runs the fund.
CPN shares closed yesterday on the SET at 56.25 baht, down 25 satang, in trade worth 248 million baht.