Tesco Lotus yesterday announced plans for an initial public offering (IPO) of a Thai property fund to be listed on the Stock Exchange of Thailand.
With an appraised asset value of more than 14 billion baht, the fund would initially comprise 15 existing shopping malls, each anchored by a Tesco Lotus hypermarket, in prime locations across Thailand, as well as freehold land and ground leases. The company said it would be the largest property fund in Thailand.
Sompong Rungnirattisai, the property director at Tesco Lotus, said the application to establish the property fund, to be called Tesco Lotus Retail Growth Freehold and Leasehold Property Fund, had already been filed with the Securities and Exchange Commission (SEC) and the IPO process would begin in the next few months.
Without a guarantee of a minimum return to individual investors, the IPO will be the largest property fund offering in Thailand and the most geographically diverse, with a strong portfolio in Bangkok, major provinces and popular tourist areas. The final structure of the fund will depend on the SEC and market conditions.
Tesco Lotus has appointed Krung Thai Asset Management as its property fund manager and Phatra Securities as its domestic bookrunner.
The company will hold up to 33% of the total units in the property fund, in compliance with SEC regulations. It also intends to make the IPO units available to both institutional and retail investors.
Tesco Lotus will continue to lease hypermarkets in the 15 shopping malls from the property fund.
"The announcement of the property fund has confirmed our commitment to continue investment in Thailand for the long term," said Chris Bush, the chief executive of Tesco Lotus.
The funds raised by the offering will be reinvested in Tesco Lotus distribution centres, in refurbishing existing stores (including hypermarkets and Tesco Lotus Express outlets) and in expansion.
"I'm delighted that it also gives our customers, staff, business partners and stakeholders a way to participate in Tesco Lotus's growth and success," said Mr Bush.
Tesco Lotus operates about 800 outlets in Thailand in various formats, including hypermarket, Talad Lotus and Tesco Lotus Express stores in 60 provinces.