BANGKOK, Oct 10 (Reuters) - Thailand's biggest warehouse developer WHA Corp said on Monday it plans to launch a real estate investment trust (REIT) worth 8.02 billion baht ($230 million) in November with underlying assets in industrial estates of its Hemaraj unit.
This will be the first REIT under the Hemaraj brand after WHA, builder of bespoke warehouses for lease, acquired industrial land developer Hemaraj Land and Development Plc in early 2015.
Hemaraj Leasehold Real Estate Investment Trust (HREIT) will offer 569.4 million trust units to unit holders of WHA Premium Growth Real Estate Investment Trust, or WHART,, WHA said in a statement.
While WHA will use part proceeds to repay four billion to five billion baht of debt to bring down its debt-to-equity ratio to 1.7x from above 2x by the end of 2016, Hemaraj aims to hold at least 15 percent in HREIT, said Jareeporn Jarukornsakul, Group CEO, WHA Corporation Plc.
Hemaraj will sell assets worth two billion baht a year to Hemaraj REIT in the future, Jareeporn told a news conference, adding that WHA will expand the size of its nine-billion baht REIT by selling more assets worth four billion baht later this year.
Hemaraj REIT will invest in 30-year rights of land, high quality ready-built factories and warehouses in six projects in Eastern Seaboard areas in Chonburi and Rayong provinces with combined net leasable area of 261,314 square metres.
The REIT is expected to have a return on investment of about 7.75 percent to 8 percent in the first year, the statement said.
The Eastern Seaboard is Thailand's strategic location for industrial development such as automotive and parts, electronics and logistics.
Siam Commercial Bank is the financial adviser and lead underwriter. ($1 = 34.8800 baht) (Reporting by Manunphattr Dhanananphorn and Khettiya Jittapong; Editing by Vyas Mohan)