LH Group to Launch REIT for Grande Centre Point Hotel Terminal 21' in Asok-Sukhumvit, Business/Shopping District with BTS/MRT connection
L&H Property Co., Ltd., a subsidiary of Land & Houses Group, introduced LH Hotel Leasehold Real Estate Investment Trust (LHHOTEL), which will invest up to THB 4.01 billion in the leasehold project ‘Grande Centre Point Hotel Terminal 21’ for about 25 years. Thanks to its location in the downtown Asok-Sukhumvit area, where business, investment and tourist destinations abound, and to its great proximity to Terminal 21 shopping center and BTS skytrain station as well as MRT metro station. The annual average occupancy rate during 2012-2014 is higher than 85%.
Miss Kanokvalee Viriyaprapaikit, a director of L&H Property, a subsidiary of Land & Houses PCL, one of Thailand’s major real estate developers, revealed the company’s decision to promote a new hotel Real Estate Investment Trust (REIT), called ‘LH Hotel Leasehold Real Estate Investment Trust’ (LHHOTEL), which will be the first REIT investing in a hotel located in Bangkok CBD, at the connecting point of both BTS skytrain and MRT metro networks. The REIT will acquire leasehold rights, with a term of about 25 years, to Grande Centre Point Hotel Terminal 21.
Locating adjacent to Terminal 21 shopping center in the Asok-Sukhumvit district, on Bangkok’s shopping street, which has more than 500 retail shops, including restaurants, fashion accessories shops, cinemas and supermarket. This area is a connecting point with variety of business, investment, tourist, entertainment and lifestyle. Owing to this fact, Grande Centre Point Hotel Terminal 21 attracts both tourists and corporate groups. It generates consistently great operating results.
Due to the hotel’s strategic location and Thailand’s booming tourism industry, especially the regular arrivals of Asian tourists – including those from Japan, Hong Kong and Korea –the major hotel guests. The occupancy rate and room revenue rise continuously.
Mrs Chantana Kanchanagama, President, Land and Houses Fund Management Co., LTD , as REIT manager, said that IPO of LHHOTEL is in the process of SEC approval. LHHOTEL is a great opportunity for investors who are looking for a modern hotel in Bangkok CBD surrounded by premium-grade office buildings and shopping centers, located close to both BTS skytrain and MRT metro stations, with the potential to improve its occupancy rate and room revenue further.
L& H Hotel Management Co., Ltd., which will enter into the master lease agreement of the hotel, with a payement of fixed rent of THB 240 million per year on a quarterly basis for three years, plus a variable rent subject to terms and conditions of the master lease agreement.
She added that the hotel, which has operated for more than three years since February 2012, has 28 floors with two basement floors and the total investment area of about 47,298 sq.m. with amenities and facilities for guests, both tourists and corporate groups.
The hotel has an outstanding performance. During 2012-2015, the annual average occupancy rate is higher than 85% and the annual average growth rate of room revenues from 2012 to May 2015 is about 13%.
Miss Vorada Thangsurbkul, First Executive Vice President Investment, Banking Division, Siam Commercial Bank PCL, as Financial Advisor and Underwriter, noted that Land & Houses Group is proud of this trophy asset. The competitiveness is derived not only from its prime location in the city business and shopping area but also from its new condition and good maintenance. She expressed confidence that the hotel will generate attractive return and revenue growth, compared with hotels of the same class in neighborhood area. The REIT, she said, will invest up to THB 4.01 billion in the property, with a bank loan not more than THB 800 million. About 15% of its shares will be offered to the property owner’s shareholders or their affiliates, and the remaining 85% will be allotted to institutional and retail investors.