The SEC started counting Day 1 of filing approval process. HREITs 1st capital increase, invested in additional assets of not exceeding THB1,690 million.

Stocks and Financial Services Press Releases Wednesday November 15, 2017 09:07
Bangkok--15 Nov--Media Planner Consultants
Rights offering not less than 50%. XR Date is on November 24, 2017

The SEC started counting Day 1 of filing approval process, for HREIT 1st capital increase for investment in the 30-year long term leasehold right of factories and warehouses and 30-year leasehold subscription extension, totaling 60 years, with the assets worth of not exceeding THB1,690 million. Additional invested assets are 100% fully occupied with 3 years guarantee mechanism compensating for vacant units and compensating for the gap between the rental rate of newly occupied units and the guarantee rate. This leads to the growth of the total assets with an approximate of THB10,000 million. The fund-raising process of the additional invested assets is expected to complete within this year. Rights offering not less than 50%. The first XR date will be posted on November 24, 2017. HREIT approves cash payment for decrease in value of investment trust from capital reduction from its quarter 3/2017 operation of THB 0.1903 per unit.

Ms. Kanchana Ouaoborm, Managing Director of Hemaraj REIT Management Co., Ltd., the REIT Manager of Hemaraj Leasehold Real Estate Investment Trust (HREIT) disclosed that the Office of the32Securities32and Exchange Commission (the SEC Office) approved counting Day 1 filing (35-REIT) of unit trust issuance for investment in HREIT and registration statement/ prospectus of the first trust unit issuance for fund-raising on October 2017. The fund-raising process is expected to complete by the end of 2017. After the capital increase, the total assets of the HREIT would be enhanced to almost THB10,000 million from an approximate of THB8,000 million of the existing assets.

HREIT approves cash payment for decrease in value of investment trust from capital reduction from its quarter 3/2017 operation of THB 0.1903 per unit. Since its inception in late 2016, HREIT has distributed the dividend payment and cash payment for decrease in value of investment trust from capital reduction in total of THB 0.6412 per unit whichare approximately 9% annual yield on investment over the current market price..

The capital increase of the HREIT is the investment in the leasehold right of ready-built factories and ready-built warehouses in Hemaraj Industrial Estates/Land and a Hemaraj Logistics Park in total of 5 locations, mainly located in the area of Eastern Economic Corridor (EEC), consisting of Eastern Seaboard Industrial Estate (Rayong) (ESIE), Hemaraj Eastern Seaboard Industrial Estate (HESIE), Hemaraj Chonburi Industrial Estate (HCIE), Hemaraj Logistics Park 4 (HLP4), and Hemaraj Saraburi Industrial Land (HSIL), with the HREIT's total leasable building area of 55,131 square meters, increased from the current investment of 261,314 square meters in Chonburi and Rayong provinces. Therefore, the HREIT's total leasable area, after the additional investment, is 316,445 square meters.

""The HREIT's additional asset investment of not exceeding THB1,690 million is to invest in the 30-year long term leasehold right of ready-built factories and ready-built warehouses and 30-year leasehold subscription extension, totaling 60 years, with the total assets area of 55,131 square meters, consisting of 47,552 square meters of ready-built-factories, and 7,579 square meters of ready-built-warehouses. They are high quality assets in Hemaraj Industrial Estates located in the Eastern Economic Corridor (EEC), and in Hemaraj Saraburi Industrial Land (HSIL) located in strategic location covering northern part of Bangkok. The buildings are 100% fully occupied. The assets have the average age of only 5.26 years. In addition, the fund-raising of asset acquisition is from the additional investment units of not exceeding 133.28 million units and long-term loan from financial institutions of not exceeding THB600 million"", said Ms. Kanchana.

The REIT Manager added that the HREIT's unit issuance and offering for the 1st capital increase, the allocation of trust issuance and offering units of not less than 50% of the issued and offered trust units for the capital increase to existing trust unitholders (Rights Offering). The record date will be on November 28, 2017. The existing unitholders are allotted trust units with the ratio of 8.5438 existing trust units per 1 new trust unit. The first XR date is on November 24, 2017. Subscription period of HREIT's 1st capital increase offered to existing trust unitholders and general public is expected to take place around Mid-December 2017. The offering price will later be announced, subjected to the SEC filing approval process.

The additional invested assets are good quality with 100% occupancy rate. They have the potential to generate revenue which increases the benefit to the HREIT. Moreover, sponsors agree to support on guarantee mechanism for 3 years from initial investment, compensating for the vacant units and compensating for the difference between rental rates of units occupied by new tenants and the guarantee rate for any units leased out below the guarantee rate. Additionally, sponsors agree to be responsible for maintenance CAPEX for 5 years from initial investment. This is to strengthen the rental revenue of the HREIT. The source of revenue is diversified with various tenants, leading to the less dependent on the existing tenants.


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