Advancing the Conversion of LPF into AXTART: Unlocking Investment Potential and Creating New Opportunities for Enhanced Returns

Advancing the Conversion of LPF into AXTART: Unlocking Investment Potential and Creating New Opportunities for Enhanced Returns

Lotus’s Retail Growth Freehold and Leasehold Property Fund (LPF), established with the objective of investing in retail-focused real estate in Thailand, is set to be converted into Axtra Future City Freehold and Leasehold Real Estate Investment Trust (AXTRART) in November 2024. This transformation follows the Securities and Exchange Commission’s approval of the filing for new trust units in September 2024. The strategic shift aims to unlock investment restrictions, create new opportunities and aim to deliver greater returns for investors.

Mr. Sarnthor Mudhasakul, Managing Director of Axtra Future City Property REIT Co., Ltd., the REIT Manager of AXTRART, explained, “AXTRART is dedicated on being a reliable partner for investors, working together to achieve mutual growth. We recognize the potential for future investment expansion through the REIT structure, which enables registered capital increase and the use of debt financing for additional property acquisitions. This prompted the initiative to seek approval for the transformation from LPF to AXTRART, representing a crucial step in the fund’s evolution to create sustainable growth opportunities and long-term value for our unitholders.”

Here are the key advantages and benefits of converting to AXTRART:

• Expanding Investment Opportunities: AXTRART can issue and offer additional trust units to invest in new real estate properties, fostering growth and diversifying the investment portfolio. It can also utilize debt financing to boost investment returns (Gearing Benefit) and manage cash flow and debt repayment efficiently.
• Reducing Costs: Lower registration and related conversion fees enable the trust to reduce expenses and increase returns for unitholders.
• International Management Standards: The trust adheres to a globally recognized real estate investment model with stringent regulations and oversight, enhancing credibility and attracting both domestic and international investors.

AXTRART is a trust established to support the conversion of LPF, with a 1:1 conversion ratio, resulting in 2,337,282,928 new AXTRART trust units. LPF is a fund in the Property Fund and Real Estate Investment Trust (PF&REIT) index and ranks among the top four in Thailand by market value, with total asset value exceeding 32 billion baht. It includes 23 properties under the Lotus’s brand, offering over 340,000 square meters of rental space in high-potential locations nationwide, generating more than 2.8 billion baht in annual rental and service income, with a 96.5% occupancy rate in 2023 (as of September 9, 2024).

Additionally, AXTRART boasts a team of experienced and skilled property managers committed to maximizing real estate efficiency. Lotus’s, a leading retailer under CP AXTRA Public Company Limited, operates with the “SMART Community Center” concept, integrating smart living for all ages through new branch openings, opening new stores, and renovating existing branches to meet specific needs and lifestyles of local communities. This approach ensures that after the conversion, AXTRART will continue to grow and expand its investment portfolio in the future.

Currently, LPF demonstrates strong performance, with total revenue of 737 million baht and a net investment profit of 556 million baht for the first quarter ending May 31, 2024. Historically, LPF has consistently paid high dividends, with a policy of distributing dividends at least four times a year (subject to the fund’s performance).

Upon completion of the conversion, the new trust units will be registered under the name ‘AXTRART’ and are expected to be listed on the Stock Exchange of Thailand by November 2024.