Posts Tagged ‘Investment’

Foreigners flock to st register residences

Wednesday, December 8th, 2010

Bangkok’s residential property market surged in November with Thailand’s Minor Group completing sales of 7 luxury residences within November worth Bt680 million.

 Foreign buyers comprised 60 per cent of the buyers for the limited offering of 45 three- and four-bedroom residences and eight penthouses. Priced on a leasehold basis for 30 years, the units are located on the top 21 floors of the upscale mixed-use St Regis Hotel, which is scheduled to open in March next year.

While a global branding has played a key storyline, unit owners can avail a menu of hotel services and access to facilities but there is no rental pool operation so buyers are primarily end users.

Presently 26 units in the project are available for purchase in a finished hand-over condition. Six out of eight premium penthouse units have been sold. A pleasant surprise has been the strong Thai market making up 40 per cent of the market composition.

Full furniture fit-out packages priced from Bt7.5 million have received strong uptake. In line with the market positioning, important items like kitchens by worldwide brand Gaggenau and Pogen Pohl have struck a favourable note with clients as have the teakwood flooring and fully fitted bathroom specifications.

Given that all 53 residences directly overlook the Royal Bangkok Sports Club and are near luxury hotels such as the Four Seasons, Grand Hyatt Erawan and Siam Paragon, the St Regis Residences look to become the premier address in the city once fully opened.

For entrepreneur Bill Heinecke, the strategy to develop a smaller number of premium-sized residences has proved to be a winning combination along with the confidence to build out during a time of economic and political challenges and to promote and sell them now ready. Clearly the current near-complete status is fuelling demand.


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Thailand’s SEC paves way for REITs

Wednesday, October 27th, 2010

The Thai Securities and Exchange Commission has approved the regulatory framework to create Real Estate Investment Trusts (REITs) in Thailand. The SEC made the announcement of the passage on October 11 and law firm Baker & McKenzie summarized the findings in a recent report.

Currently the only property fund available in Thailand is the Thailand Property Fund for Public Offering (PFPO) which was introduced in 2002 and has been viewed by investors as too restrictive. The introduction of REITs in Thailand would provide a new investment choice with greater flexibility than the PFPO.

REITs in Thailand will use trusts as investment vehicles and list trust certificates on the Stock Exchange of Thailand, the Baker & McKenzie report says. REITs will be governed by the same rules as normal companies with party-related transactions, good corporate governance, and independent directors.

Baker & McKenzie says that the features that will make REITs in Thailand more attractive than the PFPO include: Permissible investments, which means that REITs can invest in any type of real property that generates revenue except for ones involving illegal or immoral businesses; maximum total borrowings of 50% NAV as opposed to 10% for the PFPO; maximum holding restrictions by persons in the same group of 50% as opposed to a 33.3% rule for PFPOs.

Only SEC licensed REIT management companies will be able to oversee REITS. The tax structure, one of the most important elements of the regulatory framework, is currently being discussed by the SEC and Thai Revenue Department.


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Dusit Thani sets up property fund

Saturday, October 9th, 2010

Dusit Thani’s shareholders have approved the establishment of a Bt4-billion property fund for management of three of its luxury hotels: Dusit Thani Laguna Phuket, Dusit Thani Hua Hin and dusitD2 Chiang Mai. The company will also invest in one-third of the fund’s investment units.

This followed the company’s acquisition of Dusit Thai Laguna Phuket from Laguna Resorts & Hotels at a total value of about Bt2.716 billion. 

The company has been hired to provide hotel management service for the resort for 23 years. 

Dusit chief executive Chanin Donavanik said the resort’s 34 rai (5.44 hectares) of land, 12 buildings and hotel utilities worth Bt2.75 billion would be transferred to the property fund.

To make the fund attractive, the company’s subsidiary, Dusit Thai Properties, will also sell its assets in dusitD2, worth Bt350 million to Bt400 million, to the fund.

The subsidiary will also lease out the assets of Dusit Thani Hua Hin – including 63 rai of land, six buildings and hotel utilities – to the fund for a 30-year term at the total value of Bt850 million to Bt950 million.

  ”After the Securities and Exchange Commission approves the establishment of the property fund, Dusit will buy one-third of the fund worth in the range of Bt1.3 billion to Bt1.37 billion,” Chanin said.

 A wholly owned subsidiary will be set up as a special-purpose vehicle (SPV) to support the management of the fund’s assets by leasing and/or subleasing the assets from the fund.

As the lessee and hotel operator, Dusit can maintain management services and retain the desired rate of returns. Krung Thai Asset Management will manage the fund. King Eng Securities (Thailand) and CIMB Securities (Thailand) are the financial advisers for the fund establishment.

 ”Putting the three hotels in the same property fund will make it large enough to attract investors from all segments and will allow more liquidity,” Chanin said.

 He believes the fund will appeal to investors given that the three properties are in different provinces, and hence reduce future external risks. Dusit will also maintain partial ownership as well as provide the management services.


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