Asset-minded Phatra jumps into REIT fray

Phatra Asset Management is set to enter the real estate investment trust (REIT) business as a part of its strategy to generate longterm and sustainable growth.

Managing director Yuthapol Laplamool said the company recently applied for a REIT manager licence with the Securities and Exchange Commission, as property and REIT funds are an investment asset class with long-term growth and regular income.

These funds also offer an efficient investment choice for customers’ asset allocation, Mr Yuthapol said.

The company will not focus on launching new mutual funds, but rather emphasise funds characterised as tools to enhance customers’ ability for asset allocation, he said.

There are opportunities that consumer and tourism businesses can raise funds through REITs, he said.

“The REIT business is quite challenging for independent REIT managers in Thailand, as most of the market belongs to sponsored REIT managers,” Mr Yuthapol said.

At the end of 2017, the company had assets under management worth 88.41 billion baht, up 67% year-on-year.

When property funds were structured as property mutual funds under the previous law, asset management companies had to act as property managers. The SEC then introduced the REIT business model five years ago, letting asset owners become REIT managers.

REIT managers have subsequently migrated from mutual fund companies to sponsored asset firms.

Property funds and REITs have become a popular investment asset class for Thai investors because of their attractive dividends, ranging from 4% to 7%. Dividends are dependent on the type of asset, leasing conditions and related investment risks.

But most REIT managers are asset owners (or sponsors), while only two of the 21 listed REIT managers are independent.

“We aim to be a professionally active independent REIT manager, providing various types of REITs for customers,” Mr Yuthapol said.

The Kiatnakin-Phatra Financial Group has decades of experience in the property sector and has a strong connection with small- and medium-sized property business owners, a niche segment in which the group has expertise, he said.