Investors are gearing up for Thai property IPO bonanza

Hong Kong

FOR investors seeking a slice of Thailand's property market, this is turning out to be the year to do just that.

S Hotels and Resorts (SHR), the hotel arm of real estate group Singha Estate, began gauging investor interest on Monday for an initial public offering (IPO). The chief executive officer of Singha Estate said last year that the IPO could raise between US$300 million and US$400 million.

The planned spinoff comes on the heels of billionaire Charoen Sirivadhanabhakdi's proposed IPO of Asset World Corp, the Thai developer of hotels, shopping malls and office buildings, which could raise as much as US$1.6 billion.

Asset World will stop taking orders for the IPO on Friday and is expected to list on the Thai stock exchange on Oct 10, according to terms for the deal obtained by Bloomberg.

Thailand has seen just two real estate IPOs this year, which have raised a combined US$32 million, data compiled by Bloomberg showed.

The most raised by the sector in first-time share sales over the past 10 years was in 2015, when proceeds came in at US$258 million, the data shows, making 2019 a bumper year if Asset World and SHR go through as planned.

Mr Charoen's TCC Group and Singha Estate, controlled by the Bhirombhakdi family, are raising funds from the listings of their hospitality units to finance acquisitions and the construction of new hotels.

They are trying to tap into a tourism boom in Thailand, and Bangkok was recently ranked as the world's most visited city by MasterCard Inc.

SHR launched a new upscale resort in the Maldives just last week as part of its Crossroads project there, featuring the Hard Rock Hotel Maldives. It has also been developing a new upscale resort brand which will be applied to the SAii Lagoon Maldives project.

Singha Estate has said that hospitality has the best growth outlook compared to residential and commercial property.

The rise in property developer IPOs in Thailand comes, however, as the Stock Exchange of Thailand's Property Development Index has dropped 2.2 per cent this year. BLOOMBERG