SHREIT to invest in 2 hotels in Malaysia, Indonesia, float capital-increase shares, raise AUM to THB 10bn to capitalise on booming ASEAN tourism

Stocks and Financial Services Press Releases Thursday August 23, 2018 13:52
Bangkok--23 Aug--MT Multimedia

After winning unitholders' approval, SHREIT announced its decision to invest in two hotel properties in Asean, i.e. Sofitel Bali Nusa Dua Beach Resort (Bali, Indonesia) and Hilton Garden Inn Kuala Lumpur (Malaysia), for which it will borrow approx. USD 62.5 million (approx. THB 2.081 billion) and issue up to 415 million units for subscription by the existing unitholders (at least 50%) and by the public. The deals will raise its AUM to THB 10 billion. Its management expressed confidence in the target properties' great potential, citing growth in the number of local and international tourists.

Mr. James Lim, Executive Director of Strategic Property Investors Co. Ltd. (SPI), an independent professional REIT management firm and Manager of Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT), revealed that SHREIT is seeking to invest in two more hotel properties in the Asean region, namely (i) a leasehold interest in Sofitel Bali Nusa Dua Beach Resort (Bali, Indonesia), a five-star hotel with 398 guestrooms, 17 villas and a comprehensive range of facilities, including large conference rooms and event venues that are suitable for international meetings, incentives, conferences and exhibitions (MICE); and (ii) a freehold interest in Hilton Garden Inn Kuala Lumpur (Kuala Lumpur, Malaysia), a four-star hotel with 532 guestrooms and the only international hotel that is located in Chow Kit, a district neighbouring Kuala Lumpur City Centre (KLCC) - the city's core business district and major tourist spot.

He said that these two target properties have great potentials: Bali is an international tourist destination for which Indonesia grants free visas to tourists from 169 countries. It posted growth in number of tourists for the past 10 years at an annualised rate of 14.6%, with the number of tourists reaching 5.5 million in 2017 and expected to jump to 6.5 million this year. Indonesia is also enjoying excellent growth in MICE industry. This October the country will host an International Monetary Fund and World Bank Group conference and exhibition event with more than 15,000 participants who are representatives from around the world, which will also enhance the growth of hotel businesses in Bali. As for Kuala Lumpur, it is ranked 10th among the world's most visited cities and, due to its popularity among Chinese, Indian and Middle Eastern tourists, records constant growth in number of tourists, with annualised rates for the past 10 years at 4.8% for international tourists and 12.3% for local tourists.

Mr. Patan Somburanasin, Managing Director of SPI, noted that SHREIT will finance the investment cost (estimated to total THB 5.8 billion) by issuing up to 415 million units to increase its capital and securing loans totaling approx. USD 62.5 million (approx. THB 2.081 billion), and that the investments will increase the value of its assets under management (AUM) to THB 10 billion from the current level of approx. THB 5 billion and will turn it into one of the largest real estate investment trust (REIT) that is listed in the Stock Exchange of Thailand.

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