KPN Group Corporation, the investment arm of the Narongdej family, will launch an initial public offering (IPO) of a property fund in mid-March to mobilise cash for two new condominium projects.
Kris: Location and price the priorities
The 27-storey KPN Tower comprising 59,839 square metres will be used as the underlying asset of the KPN Property Fund, group chairman Kris Narongdej said.
The office building on Rama IX Road is valued at 2 billion baht.
Mr Kris said the KPN Group will own one-third of the property fund.
KPN Tower has 90% occupancy on average.
Rental income contributes 80% of the tower's revenue, while advertising from tower wrappings makes up the rest.
Its location near the Orange Line electric train route from Taling Chan to Min Buri could add value for those who buy the fund's IPO units.
The train service will be rolled out in 2019.
The freehold property fund is expected to yield a 6% return a year to unit trust holders, Mr Kris said.
It will have a dividend payout policy of at least 90% of net profit.
Kasikorn Securities is serving as financial adviser for the property fund.
Mr Kris said that sales of two new condo projects with a combined value of 5-7 billion baht will be launched this year.
KPN Group's property arm is also in talks to acquire an office building.
The Narongdej family has long been well known in the automotive industry and for music schools.
The family in recent years has diversified into property.
"We focus on competitive locations and price," Mr Kris said.
He said KPN Group plans to list its property firm on the Stock Exchange of Thailand next year.