Bangkok Airways has announced the launch of Thailand's first airport real estate investment trust (BAREIT), which it is promoting with an estimated 8.46% first-year yield.
The firm believes Thailand's promising tourism rebound will make its 14.3-billion-baht REIT an attractive financial product to potential investors.
The BAREIT offers a 25-year leasehold rights contract for five main properties used for the company's Samui airport operations: the single 2.1-kilometre runway, a taxiway, a check-in terminal, passenger terminals that serve both domestic and international travellers, and a fire station.
The REIT, which has a listed appraisal value of 14.3 billion baht, is expected to raise 10.3 billion baht in capital from investors buying the trust units, while the rest of will come from long-term loans.
Bangkok REIT Management Co serves as the REIT manager and Kasikorn Asset Management Co as the REIT trustee.
BAREIT is awaiting regulatory approval from the Securities and Exchange Commission following its filing in early April of this year.
Puttipong Prasarttong-Osoth, president of Bangkok Airways, expressed confidence in BAREIT and its growth potential, noting that relaxed travel regulations to enter Thailand serve as a positive factor in terms of Samui's tourism and, ultimately, Samui airport.
"This year, things have started to return to normal. In the first quarter of 2022, Samui airport serviced 993 flights which amounts to approximately 66,738 passengers. As we advance, I am certain that we will continue to see improvement in the number of passengers in future quarters, too," Mr Puttipong said.
Throughout Samui airport's 33 years as a public airport, Bangkok Airways has promoted tourism that is friendly to the environment. It has also carried out several CSR projects.
"It is not just about increasing the number of flights, but things have to go hand in hand with sustainability and active CSR projects, from planting trees to empowering the youth and showing them how aviation works. The kids love the flight simulators, and I hope that it inspires and paves the way for them to be curious and have fun about the world," he said.
Bangkok Airways' Samui airport is Thailand's first privately-owned airport that serves both inbound and outbound flights and is capable of receiving 16,000 passengers daily or about six million passengers annually. The airline expects that the number of passengers serviced by Samui airport would reach the regular level by 2024.
Leelapat Leelahavanich, managing director of Bangkok REIT Management Co, said BAREIT is an appealing investment option for those who wish to invest in trust funds that yield good and stable returns over the long term.
"You can see that we carefully selected five properties to include in the BAREIT. They are directly related to the airport's operations. This means that BAREIT will have regular earnings from lessees, yielding steady returns on investment, a good alternative to generate income for long-term investment," she said.
She said BAREIT differs from Samui Airport Property Fund (SAF) in three areas.
First, it has better growth potential because it allows the trust fund to add more assets in the future if it wishes. Second, BAREIT can take out loans of no more than 35% of its total assets, while SAF has limitations when it comes to taking out loans and, lastly, BAREIT yields stable returns.
Sawit Srisarunyapong, head of investment banking business at Kasikornbank, said BAREIT should be ready for trading on the Stock Exchange of Thailand this year.