Up to 410m SHREIT units for 1st capital increase to be offered for subscription at THB 9.45 per unit during Dec 6-13

Stocks and Financial Services Press Releases Monday December 3, 2018 17:51
Bangkok--3 Dec--MT Multimedia

To complete SHREIT's first capital increase and finance the acquisition of a leasehold interest in Sofitel Bali Nusa Dua Beach Resort (Bali, Indonesia) and a freehold interest in Hilton Garden Inn Kuala Lumpur (Kuala Lumpur, a Malaysian city with booming domestic tourism and economy), up to 410 million SHREIT units will be issued and offered at the final price of THB 9.45 each, and will be available for subscription by the existing unitholders during 6-11 December (business days only) and by other institutional and retail investors during 6-13 December (business days only). This will increase SHREIT's yield to 8.5% approximately in the first year after the capital increase, and will assert SHREIT's position as a top-yielding hospitality REIT in SET.

Mr Artapong Porndhiti, Executive Vice President, Investment Banking 2, The Siam Commercial Bank Public Company Limited, as Financial Advisor and Lead Underwriter, revealed that for SHREIT's first capital increase, up to 410 million units of Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT) will be issued and allotted to (i) the unitholders of record who are eligible and not US persons, in a preferential public offering, at the ratio of 1 existing trust unit for 0.5881 unit of newly issued one for total of 207.5 million units(or approximately 50.6% of the newly issued units) and (ii) the general public (public offering).The final offering price is THB 9.45 per unit. The capital raised, together with loans, will be invested in two more South-East Asian properties with a combined value of up to USD 171.64 million (approximately THB 5.684 billion).

The Office of Securities Exchange Commission (SEC) has granted the application to make a public offering, and the registration statement and the prospectus have become effective. The unitholders of record as of 23 November will be able to subscribe for units as proportionately allotted to them during 6-11 December, and other institutional and retail investors during 6-13 December. They will have to contact The Siam Commercial Bank Public Company Limited or Maybank Kim Eng Securities (Thailand) Public Company Limited during business hours on business days, or a selling agent nominated and identified in the effective prospectus. The subscription amount will be 1,000 units (minimum) or a greater multiple of 100 units.

Mr Prasert Tantayawit, Managing Director for Investment Banking of Maybank Kim Eng Securities (Thailand) Public Company Limited, expressed his confidence that the offering will be enthusiastically welcomed by the existing unitholders and new investors, given the consistently high performances of SHREIT since its inception in late 2017 and its impressive portfolio of initial assets: extendable freehold and leasehold interests in three- to five-star hotels in South-East Asia, namely Pullman Jakarta Central Park in Indonesia (five stars, 317 guestrooms, situated in Jakarta, Indonesia), Capri by Fraser (four stars, 175 guestrooms) and IBIS Saigon South (three stars, 140 guestrooms, situated in Ho Chi Minh City, Vietnam).

An investor who has held SHREIT units since the first trading day will have enjoyed investment returns in the form of dividends and capital returns for total of THB 0.5997 per unit from the first 10 months operating performance of this year (as at the end of October 2018). This makes SHREIT a top-yielding hospitality real estate investment trust (REIT) in the Stock Exchange of Thailand (SET).

Mr Patan Somburanasin, Managing Director of Strategic Property Investors Co. Ltd., an independent professional REIT management firm and REIT Manager, noted that SHREIT is seeking to invest in two more hotel properties in the Asean region, namely (i) a leasehold interest in Sofitel Bali Nusa Dua Beach Resort (Bali, Indonesia), a five-star hotel with 398 guestrooms, 17 villas and a comprehensive range of facilities, including large conference rooms and event venues that are suitable for international meetings, incentives, conferences and exhibitions (MICE); and (ii) a freehold interest in Hilton Garden Inn Kuala Lumpur (Kuala Lumpur, Malaysia), a four-star hotel with 532 guestrooms and the only international hotel that is located in Chow Kit, a district neighbouring Kuala Lumpur City Centre (KLCC) - the city's core business district and major tourist spot.

"We believe that the two target assets for the first round of additional investment provide diversification benefits. One of them is located in a tourist destination and the other in a business district, and they attract different groups of customers. The Malaysian capital city of Kuala Lumpur is frequented by a wide array of international tourists, especially those from China, India and the Middle East. For the past five years, Hilton Garden Inn Kuala Lumpur's annualised rate of growth in number of tourist guests stood at 5.9%. The number of local tourists who visited the city also rose 9.0%. Meanwhile, the Indonesian island of Bali, an international tourist destination, posts an annualised rate of growth in international tourist arrivals at 14.8%", said he.

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