SET Senior Executive Vice President Manpong Senanarong said that GROREIT would list and start trading on Property & Construction industry, Property Fund & REITs sector.
This REIT buy-back investment type has been approved by The Securities and Exchange Commission (SEC) to offer property developers an option for fund raising, boost liquidity during the COVID-19 pandemic. GROREIT will be considered the first REIT buy-back to be listed on SET.
GROREIT offered 315 million trust units at THB 10 each, for a total of THB 3.15 billion, to institutional investors and general public during June 28 and July 9, 2021. One Asset Management Limited is the REIT manager and underwriter in a best-effort offering and MFC Asset Management PLC is the trustee.
GROREIT has invested in the Royal Orchid Sheraton Hotel & Towers project, an upper-upscale (five-star) hotel class managed by Starwood Hotels & Resorts Worldwide, Inc. under Marriott International. It is prominently situated at the bend of Chao Phraya river, with all the rooms facing scenic views, and at the heart of Bangkok. There are 726 rooms and the facilities that meet international hotel standards. The REIT has a contract obliging Royal Orchid Hotel (Thailand) PCL, the former owner, to repurchase the assets within 5 years.
One Asset Management Chief Executive Officer Pote Harinasuta said GROREIT, the first REIT buy-back in Thailand, will invest in the freehold right of the land plot and building of the Royal Orchid Sheraton Hotel & Towers project worth THB 4.50 billion. The interesting feature of this type of REIT is that the former owner has the obligation to repurchase the assets at fixed prices and as scheduled. GROREIT will invest during the period of not more than 5 years as the former owner has a repurchase option in the 3rd or 4th year and has the obligation to buy back the assets in the 5th year with the internal rate of return (IRR) at about 8 percent per annum. However, in terms of investment, while not being repurchased, the IRR is set at about 6 percent per annum.
GROREIT has steady income from lease contracts of real estate and movable assets. Its dividend policy is to pay not more than 4 times a year at no less than 90 percent of the adjusted net profit of the accounting year. GROREIT's three major shareholders after the IPO are 1) KGI Securities (Thailand) PCL (23.89 percent), 2) One Property Plus Fund (1.89 percent) and 3) Kultida Boon-itt (1.62 percent).
For more information on GROREIT, please see its prospectus at the Securities and Exchange Commission's website at www.sec.co.th, and the trust's general information at www.one-asset.com, as well as www.set.or.th.
Source: SET Corporate Communications