Thailand to introduce REITs from June

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Bangkok Skyline
Bangkok’s property industry gets a new investment vehicle in the form of REITs (image © arno maierbrugger)

The Securities and Exchange Commission (SEC) of Thailand will allow the establishment of Real Estate Investment Trusts (REITs) in the country from June 2012, the Bangkok Post reported on May 11.

A REIT is a tax designation for a corporate entity investing in real estate. REITs provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks. REITs have already become popular property investment vehicles in Thailand’s neighbouring country Malaysia, for example.

Establishing a REIT would require a minimum capital of 500 million baht, with the entity listed on the Stock Exchange of Thailand. At least 75 per cent of the capital must be invested at any time, and only up to ten per cent of assets may be invested in incomplete projects.

A number of existing property funds in Thailand are expected to convert to REITs, thanks to more flexible investment rules than existing property fund structures, the paper quoted Chalee Chantanayingyong, SEC deputy secretary-general.

Thailand REITs are also allowed to invest in overseas assets and may borrow up to 60 per cent of the cost of investment for an investment-grade asset, compared with the ten per cent limit for property funds imposed in the country. Asset management companies are permitted to establish REITs, while approved financial institutions may serve as trustees, the SEC said.

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Reading Time: 1 minute

Bangkok’s property industry gets a new investment vehicle in the form of REITs (image © arno maierbrugger)

The Securities and Exchange Commission (SEC) of Thailand will allow the establishment of Real Estate Investment Trusts (REITs) in the country from June 2012, the Bangkok Post reported on May 11.

Reading Time: 1 minute

Bangkok Skyline
Bangkok’s property industry gets a new investment vehicle in the form of REITs (image © arno maierbrugger)

The Securities and Exchange Commission (SEC) of Thailand will allow the establishment of Real Estate Investment Trusts (REITs) in the country from June 2012, the Bangkok Post reported on May 11.

A REIT is a tax designation for a corporate entity investing in real estate. REITs provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks. REITs have already become popular property investment vehicles in Thailand’s neighbouring country Malaysia, for example.

Establishing a REIT would require a minimum capital of 500 million baht, with the entity listed on the Stock Exchange of Thailand. At least 75 per cent of the capital must be invested at any time, and only up to ten per cent of assets may be invested in incomplete projects.

A number of existing property funds in Thailand are expected to convert to REITs, thanks to more flexible investment rules than existing property fund structures, the paper quoted Chalee Chantanayingyong, SEC deputy secretary-general.

Thailand REITs are also allowed to invest in overseas assets and may borrow up to 60 per cent of the cost of investment for an investment-grade asset, compared with the ten per cent limit for property funds imposed in the country. Asset management companies are permitted to establish REITs, while approved financial institutions may serve as trustees, the SEC said.

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