Charn Issara Development (CI), a SET-listed property developer, expects to book a one-time gain of 600-700 million baht in the next quarter from selling some assets to its new property fund.
The Sri Panwa Phuket, which opened three years ago, has enjoyed revenue growth of 23%.
Launched yesterday, the freehold Sri Panwa Property Fund (SPWPF) has an asset size of 2 billion baht.
The fund, to be managed by SCB asset Management (SCBAM), offers a guaranteed return of at least 7% for five years, according to Songkran Issara, managing director of CI.
He said CI will use part of the proceeds to repay debt and invest in other projects this year.
SPWPF will invest in the luxury hotel and resort Sri Panwa at Phuket, comprising 21 rai of land with buildings and equipment and rent it back to CI.
SCBAM president Jotika Savanananda said under the 15-year rental contract, the fund will increase the rental for the property charged on CI by 10% from the sixth year, and will revise it again after the 10th year.
Sri Panwa Phuket opened three years ago, with revenue growth of around 23%.
Its target customers are Chinese, South Koreans, Russians and Indians.
The fund, which is seeking approval from the Securities and Exchange Commission (SEC), has set the initial public offering price at 10 baht per unit and 60% of the total units will be earmarked to institutional investors.
Mr Songkran said the company will start building new two condominium projects this year worth a combined 1.5 billion baht.One of them is a luxury project with around 30 units on Nang Linchi Road in Bangkok. The other is a 200-unit condominium in Chiang Mai. Both projects are expected to be completed over the next two years.
CI's other projects such as the Tew Talay2 at Cha-am is expected to be ready for launch in the latter half this year.
The company expects to add the Tew Talay1 and Tew Talay2 projects to the property fund next year.
He said the company will also acquire a 30-rai plot on Bang Na-Trat Road in Bangkok to develop a luxury single-detached house project.
He said CI will launch 2-3 new projects each year, but the problem for property developers these days is labour shortage.
CI also is considering adding trading liquidity of its shares by splitting the stock's par value, and issuing stock dividend or new shares. The company will discuss the issue with financial advisers and shareholders next month.
Shares of CI closed on the SET at 10.50 baht yesterday, up 10 satang, in trade worth 1.11 million baht.