SET-listed developer Property Perfect Plc (PF) is preparing to put two dormitories in Chiang Mai and Bangkok into a property fund worth 1.5 billion baht over the next two years.
Chief executive Chainid Attayansakul (formerly Ngowsirimanee) said the dormitory in Chiang Mai has an occupancy rate of 50%. PF will put it into a property fund when the rate reaches 80%, which is expected to be next May.
With 520 rooms at a monthly rate of about 6,500 baht, Uniloft Chiang Mai, which is worth 500 million baht, is located near Chiang Mai University and targets students as tenants.
The Bangkok dormitory on Bang Na-Trat Road will be located near Abac's campus and will be completed in the first quarter of 2015 with 1,000 rooms. PT will put the campus, worth about 1 billion baht, into the property fund in the second quarter of 2015.
"Dormitory occupancy is seasonal. Its peak is in May-June and October but our contract is for a full year, so we will get rent during the semester closure as well," said Mr Chainid. "We will discuss again with our adviser about a real estate investment trust."
PF yesterday launched an initial public offering (IPO) with 52 million units priced 10 baht apiece for the Uniloft Property Fund (UNIPF), with One Asset Management (ONEAM) as the lead underwriter.
UNIPF will invest in freehold ownership rights of Uniloft Salaya's assets including three six-storey dormitory buildings with 523 rooms located on about five rai in Salaya near Mahidol University. The project value is about 520 million baht.
Over a three-year period, the mutual fund will get fixed rent from PF, the lessee, of 43.5 million baht per year. The fund has the right to extend the lease to PF for another year after the three-year lease expires.
According to ONEAM, the dividend yield will not be lower than 6.5% per year. After the lease expires, the fund will still own the assets and will benefit from a rising property price due to limited available land and the Salaya zoning regulation that controls building heights.
Mr Chainid said the Salaya campus has 18,511 students, up 31% from 14,117 five years ago.
Uniloft Salaya was completed in June and its occupancy rate was about 53% as of August. ONEAM expects it will increase to 80% by the end of this year after the second semester opens.
"Flooding like in 2011 is unlikely to happen again as the flood at that time was caused by human error," said Mr Chainid.
PF shares closed yesterday on the SET at 1.07 baht, unchanged, in trade worth 17 million baht.
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