WHA Premium Growth Real Estate Investment Trust (WHART) will start trading on the Stock Exchange of Thailand (SET) tomorrow. It is the second real estate investment trust (REIT) to list on the Thai bourse, this year. About three other REITs are expected to list on the SET in the next few months.
WHART plans to sell 310,790,000 shares with the par price of 10 baht each ($0.30), making it a 3.1 billion baht ($94 million) listing.
WHART has been formed by the SET-listed WHA Corp PCL, Thailand’s warehouse and factory developer and a market leader in premium built-to-suit warehouses for lease.
The assets underlying this REIT are three warehouses with total space of 167,107 square meters. Of this, 60 per cent is freehold and 40 per cent is leasehold. They include WHA’s warehouses at Lat Krabang district, WHA Mega Logistics Center and WHA Logistics Center located on the Bang Na-Trat Road.
The company plans to add assets worth between four-five billion baht ($121.95 milllion-$152.43 million), to the trust, every year.This would take the the size of the REIT to 50 billion baht ($1.52 billion) over the next five years.
The listing is part of the trend that has seen several Thai real estate players taking advantage of the returning investor confidence, by using the REIT format to raise funds for expansion.
Thailand’s first REIT was launched in October while three others are expected to be launched in the next few months. Many others like the Golden Land Plc have announced intentions to launch REIT in the near future. Back of the envelop calculation estimates that a collective amount of more than $500 millon dollars worth of assets will be transferred to these REITs in the next few quarters.
WHA Corp plans to use the funds from the REIT for business expansion as well as for investment in other business such as logistics and renewable projects. This would help it diversify business risk.
The company’s chief executive Somyos Anantaprayoon had earlier told the media that it was seeking opportunities to acquire potential companies that could support its goal to become a fully-integrated warehouse developer and serve clients in Southeast Asia.
In the first nine months of this financial year, it recorded a total revenue of 481 million baht and a net profit of 64.95 million baht. The company is expecting to gain the net profit of 1.463 billion baht, for the year.
Although the company’s revenue will fall to 5.5 billion baht ($168 million) in 2014 from the seven billion baht ($213 million) in 2013, WHA is expecting a surge in revenue in 2015, after selling assets to its new REIT.