Central Pattana (CPN), Thailand's leading retail property developer, is
considering establishing real estate investment trusts (REITs) abroad to help
finance business expansion within Asean.
Naris Cheyklin, the chief
financial officer, said countries such as Malaysia and Singapore are friendlier
to issuers and investors alike in terms of tax treatment for REITs.
"Our funding plan is
consistent with the company's strategy of expanding its business in the Asean
Economic Community. Raising funds in foreign currencies to help expand abroad
also will help to mitigate currency risks," he said.
Asean members have committed to
cutting barriers to the movement of labour and capital by 2015, opening up
service industries in a bid to create a single regional economic bloc.
Leading Thai companies such as
CPN have been aggressively looking for new expansion opportunities across the
region to help take advantage of the larger market.
Mr Naris said if CPN commits to
building a new department store or shopping mall abroad from scratch, then it
may finish by 2015 at the earliest.
An acquisition, however, would be
significantly faster.
"We've made no conclusions
yet. We may form a joint venture to build an property abroad or acquire an
existing property if the opportunity arises," said Mr Naris, adding that
Indonesia is one market being studied.
CPN manages 18 shopping centres,
seven office buildings, one hotel and two residential projects nationwide
including properties representing one-fourth of Bangkok's retail market.
Mr Naris said expansion into
other Asean countries will help to support CPN's retailer clients and expand
their presence internationally as well.
CPN now manages two leasehold
property funds - CPN Retail Growth (CPNRF), launched in 2005, and CPN
Commercial Growth (CPNCG), an office building fund that began trade on the
Stock Exchange of Thailand (SET) yesterday.
CPNCG units closed yesterday at
13 baht, up 2.70 baht or 26% from their initial public offering price of 10.30
baht per unit.
A total of 771.7 million units
changed hands.
The office building fund will
invest in leasehold rights for the land and buildings of the Offices at Central
World.
SCB Asset Management runs the
fund.
CPN shares closed yesterday on
the SET at 56.25 baht, down 25 satang, in trade worth 248 million baht.
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