QHHRREIT has successfully completed its conversion from a property fund to a real estate investment trust (REIT) and has acquired new assets, the Centre Point Hotel and Residence Silom. This strategic move aims to enhance the trust’s sustainable revenue potential by capitalizing on the recovering tourism sector and the new visa-free policy, positioning it as a high-potential hotel REIT in prime locations.
Mr. Monrat Phadungsit, Managing Director of Land and Houses Fund Management Co., Ltd., and manager of QHHRREIT, stated that the conversion from the Quality House Hotel and Residence Freehold and Leasehold Property Fund (QHHR) to the Quality House Hotel and Residence Freehold and Leasehold Real Estate Investment Trust (QHHRREIT) has been completed. This opportunity will gain benefits from tax exemptions and reduced fees of the conversion. Following the conversion, the "QHHR" investment units will be delisted from the stock exchange, and "QHHRREIT" units will be listed instead, with the first trading day on May 29, 2024. The trust highlights its assets in prime locations and plans to invest further in high-potential assets such as the Centre Point Hotel and Residence Silom immediately after the conversion in Q2 2024. The additional investments will be funded entirely by borrowing. This move is buoyed by the recovering tourism industry, adding diversity to the trust’s property locations, customer base, and growth potential.
Dr. Natkawin Jiamchoatipatanakul, Senior Vice Presdient of the Infrastructure and Property Fund Department at Land and Houses Fund Management Co., Ltd., and manager of QHHRREIT, stated that QHHRREIT currently owns three properties: Centre Point Hotel and Residence Petchburi (Pratunam), Centre Point Hotel and Residence Sukhumvit (Sukhumvit 10), and Centre Point Hotel and Residence Langsuan (Chidlom). These properties, primarily freehold, allow the trust to generate continuous revenue. Plus, Thailand’s status as a tourist destination has seen 9.37 million visitors in Q1 2024, a 43.5% increase from the same period last year, boosted by the visa-free policy for certain countries and partial renovations at the Centre Point Sukhumvit and Petchburi hotels. In Q1 2024, these hotels had an average occupancy rate of 88% and total revenue of 215.66 million baht, a 22.6% increase from the same period in 2019 before the COVID-19 pandemic.
QHHRREIT will invest in the first additional asset in the Centre Point Hotel and Residence Silom, which has 214 rooms. The project is part of a mixed-use development with retail space and a market, located in the well-known Bangrak area, popular destination for international customers for its views of the Chao Phraya River and proximity to Saphan Taksin BTS station. In Q1 2024, the project had an average occupancy rate of 87% and revenue of 72.66 million baht, which will contribute to the trust’s future revenue growth.
Ms. Chittisa Charoenpanich, Head-Investment Banking Business Division at Kasikornbank Public Co., Ltd., as a financial advisor, stated that QHHRREIT stands out as a hotel REIT with investments in both freehold and leasehold assets. The three Centre Point hotels currently in the trust’s portfolio are high-quality projects developed by Quality Houses Group, a leading residential and hotel developer in Thailand, located in prominent areas such as Sukhumvit, Chidlom, and Pratunam, catering to a diverse international clientele. Before conversion, the QHHR property fund had an annual dividend yield of over 9%. Converting to a REIT and investing in additional high-potential assets will increase revenue and provide additional returns to trust unit holders.
**Disclaimer: "Investors should carefully consider the fund’s investment objectives, features, conditions, returns, and risks before making an investment decision."**
