Real estate firm Frasers Property Thailand (FPT) will divest itself of 6 billion baht in industrial assets to be transferred to the subsidiary Frasers Property Thailand Industrial Freehold & Leasehold REIT (FTREIT), the largest industrial real estate investment trust in Thailand.
The company said the move, approved by FPT's board of directors this week, will allow it to maximise returns for shareholders and convert assets to capital for future development in built-to-suit projects and investments for future growth.
The divestment of assets includes 35 factories and 30 warehouses with a total area of 284,609 square metres.
The properties are located in strategic locations for industrial and logistics industry in Samut Prakan, Pathum Thani, Ayutthaya and Eastern Economic Corridor clusters.
The transaction will be conducted in four batches with an initial batch of about 3 billion baht to be transferred in fiscal 2020.
FPT continues to maintain a leadership position in the industrial property business with total assets under management of more than 3 million square metres, with portfolio occupancy of 80% as of March 2020.
"As the main sponsor of FTREIT, we continue to monetise our industrial assets in prime locations for industrial and logistics industries to FTREIT to support its growth," said FPT president Sopon Racharasksa. "These additional assets will benefit our portfolio and provide greater diversification for sustainable return to FTREIT's unit holders."
The industrial property business remains robust, thanks to growing manufacturing relocation from China because of the US-China trade conflict and the coronavirus pandemic.
"In addition, we are targeting every year to secure more built-to-suit deals that will strategically add back quality square-metre portfolios to sustain long-term sustainability," Mr Sopon said.
The company recently closed a deal to develop a smart distribution centre in Ayutthaya for Fraser and Neave, the Singapore-based food and drink conglomerate.
"Proceeds from sales of assets to FTREIT will ensure capital for future capital expenditure and investments for the company and profitability growth for shareholders," Mr Sopon said.