Ticon aims to establish Thailand’s largest REIT

Ticon Industrial Connection Plc (TICON), a SET-listed developer of ready-made factories and warehouses for rent, aims to merge the group’s three property funds into the country’s largest real estate investment trust (REIT) this year, with combined asset value of 32 billion baht.

The Ticon Property Fund was established in 2005 as the country’s first industrial property fund. The Ticon Park Logistics Fund was established four years later, followed by the Ticon Industrial Growth Fund. These three property funds could be converted into TREIT this year.

If the plan goes ahead, BBL Asset Management will be the trustee for TREIT.

The trust unitholder’s meeting will be held on Oct 18-19 to vote on the conversion plan. The meeting requires at least 75% of total unitholders’ voting rights joining the meeting on those days for approval.

“If approved, the TREIT will file the conversion plan to the Securities and Exchange Commission [SEC] to conclude the transfer of fund assets and liabilities by year-end. [The trust will have] a combined asset value of 32 billion baht — the largest industrial REIT [in Thailand],” said chief executive Virapan Pulges.

He said TREIT plans to acquire additional assets, such as ready-made factories and warehouses, worth 3.5 billion baht next year, potentially increasing the trust’s asset value to nearly 36 billion.

Due to the SEC’s law and policy to promote REITs, existing property funds are unable to expand or raise capital, prompting property funds to convert into REITs.

At present, Ticon Industrial Connection’s three funds have a combined rental space of 1.5 million square metres, covering 22 locations in seven provinces, including Bangkok and the eastern seaboard region.

The firm also has i nvestments i n Indonesia, including factories and warehouses covering 100,000 square metres on three islands.

“Thailand’s REITs give quite attractive returns compared to those of neighbouring countries. With a larger fund size of over 10 billion baht, TREIT will be able to attract foreign institutional investors,” said Mr Virapan.

The company has 1.3-1.4 million square metres for development, 70% of which is developed space located in the Eastern Economic Corridor.

TICON shares yesterday closed on the Stock Exchange of Thailand at 15.50 baht, down 20 satang, in trade worth 25.9 million baht.