Property Fund For Ibis Patong And Pattaya
Listed Erawan Group PLC have filed documents with the Stock Exchange of Thailand (SET) for the set-up of a property fund.
The Erawan Hotel Growth Property Fund will launch in the second quarter of this year and will initially invest in the Ibis Phuket Patong and Ibis Pattaya properties.
Siam Commercial Bank has been appointed as fund manager. Erawan's broader plans for an expansion by acquisition of three and four star properties in the country.
A new subsidiary Erawan Growth Management Co., Ltd. has been formed to support the planned property fund.
According to industry sources Erawan has previously focused on an asset disposal exercise in order to cash up for its expansion plans, but was unable to transact the ibis Patong at their anticipated value.
Hence they has shifted strategy to focus on recycling assets via a property fund.
Last December Erawan added 378 rooms with their newly opened ibis and Mercure hotels at National Stadium in Bangkok.
Forward plans call for a 200 room extension at the Holiday Inn Pattaya and the newbuild 2010 room Mecure Pattaya, both set to complete at the end of 2014.
Reporting on 2012 operating results one highlight for the group was a 17% uplift of year on occupancy at The Naka Resort. The property had been rebranded by Starwood's Luxury Collection after starting life under Six Senses.
Last year the resort achieved 43.8% occupancy with an average room rate of THB8,928.
The property fund sector looks to see further action in 2013 as it's understood a luxury Phuket resort is looking at injecting a prime asset into a fund later this year.