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Thailand gets its first international REIT

Image for Thailand gets its first international REIT

The real estate investment management firm Palmer Capital Asia has advised Country Group Developments to launch an industrial real estate investment trust in Thailand.

Country Group Developments, a Bangkok-based property development company, has launched Thailand’s first international Real Estate Investment Trust (REIT) that will be invested in foreign property holdings.

The MFC Industrial Trust (MIT) was listed on the Stock Exchange of Thailand in the second week of December last year at a valuation of £26 million (€34.16 million; $37.20 million).

The first asset to be listed on the REIT is a data centre located in London. Country Group Development’s subsidiary CGD Digital Partners transferred the 24,700-square foot data centre located at Anchorage Point in Greenwich to MIT, generating a 15 percent IRR on the transaction. The firm had originally acquired the asset for £20.5 million with a moderate level of debt in February 2014.

Palmer Capital Asia, the Hong Kong-headquartered real estate investment management firm, advised the firm on the listing. Palmer Capital Asia had assisted CGD Digital Partners in the asset purchase in 2014 and was also involved as its asset manager, a role it would continue to serve for the REIT.

The launch of MIT, the country’s first REIT to invest in foreign assets, will give an avenue to domestic retail investors to invest in international properties.

“The variation of Thailand REIT rules to include international properties was first proposed in 2013; however, it has taken extensive lobbying and campaigning to create the form of regulations seen today,” said Simon Tyrrell, managing director of Palmer Capital Asia. “Recent figures from the London Stock Exchange show that the UK REIT industry has grown to a quoted market cap of £3.9 trillion, from its inception in 2007. MIT provides a legitimate conduit for Thai capital to access overseas direct real estate, paving the way for more Thai capital to enter the international real estate markets over the coming years.”

The firm will be looking to acquire other industrial assets, including data centers, in Asia and the UK to list on the REIT.

Author: Arshiya Khullar, PERE