Unitholders of the Tesco Lotus Retail Growth Freehold and Leasehold Property Fund (TLGF) have approved a capital increase of 7.55 billion baht through a rights offering.
Somchai Boonnamsiri, the chief executive of KTB Asset Management, which manages the TLGF, said the additional capital will fund the acquisition of three freehold Tesco Lotus branches (Phuket, Salaya and Nakhon Si Thammarat) and two leasehold branches (Rangsit-Nakhon Nayok and Bang Pu).
The acquisitions will increase the TLGF's holdings to 22 branches from 17.
The appraised value of assets held will increase to 23.7 billion baht from 17.2 billion, with freehold assets accounting for 75% of the total portfolio, up from 73%.
Revenue per unit is expected to be 76 satang, up from 70 satang, with estimated returns to rise to 5.4% from 5%.
"The capital increase will make it the country's largest property fund, with an expected market size of 33.4 billion baht," said Mr Somchai.
Sompong Rungnirattisai, Tesco Lotus's property director, said the company expects revenue growth of 14% this year.
Tesco Lotus has opened half the 300 new branches planned for this year.
It also plans new distribution centres in Khon Kaen, Surat Thani and Lampang provinces, supplementing the three existing ones.
The TLGF listed on the Stock Exchange of Thailand in February, priced at 10.40 baht a unit. It closed yesterday at 14.80 baht, up 20 satang, in trade worth 119 million baht.
The share register for the rights issue will close on Nov 5.
Book building to price the public offering will be done late next month, with trading of the new units expected to begin about mid-December.