SET-listed Strategic Hospitality Extendable Freehold and Leasehold REIT (SHREIT) targets increasing its assets under management (AUM) to US$1 billion (31.7 billion baht) over the next 3-5 years, focusing on new investment assets in Southeast Asia's tourism and industrial sectors.
Patan Somburanasin, managing director of Strategic Property Investors Co Ltd (SPI), the REIT manager of SHREIT, said it plans to invest in new assets worth $150-200 million per year, with return on investment expected to be 7.5%-7.6% annually.
The portfolio now includes Pullman Jakarta Central Park Hotel in Jakarta, Indonesia; Capri by Fraser Hotel in Singapore; and Ibis Saigon South Hotel in Ho Chi Minh City, Vietnam. The asset net worth of the trust was $143.2 million as of Dec 31, 2018.
"For new investments, we are still focusing on hotel assets in Vietnam and other countries in Southeast Asia. We are interested in Vietnam as the country has an annual economic growth rate of 6-7%, competition in the hospitality business remains low and the number of tourist arrivals and industrial investment are increasing," said Mr Patan.
One new asset to be added to the fund's portfolio is a 3-5 star hotel in Vietnam, where SPI is negotiating with 2-3 hotel operators, he said. The acquisition is anticipated to be completed in the second half of 2019.
The fund plans to increase its capital again in the second half in order to acquire new assets in line with the business expansion plan, said Mr Patan.
Financial volatility in the global markets forced the fund to withdraw from an acquisition that affected its performance in last year's final quarter.
The cost incurred from this withdrawal is a one-time only expense and dividend payment will still reach its target in the first quarter, said SHREIT in its statement.
In August 2018, SHREIT announced its decision to invest in two Asean hotel properties: Sofitel Bali Nusa Dua Beach Resort in Indonesia and Hilton Garden Inn Kuala Lumpur in Malaysia.
SPI executive director Christophe Forsinetti said an increasing number of tourist arrivals has triggered demand for more hotel rooms.
Hotels with high international standards are still lacking in the region, with the exception of Thailand and Singapore, said Mr Forsinetti.
The environment provides a great opportunity for SHREIT to place itself as a key player and activate long-term growth by investing in established brands and high-quality hotels in the region, he said.
"We are studying the acquisition of more assets while considering improvements to assets we already own," said Mr Forsinetti.
SHREIT shares closed yesterday on the SET at 6.95 baht, up 0.05 satang, in trade worth 18,000 baht.