ING to begin sale of property fund with targeted 11% return ING Funds said yesterday that initial sales for its new 1.9-billion-baht property fund would begin from March 3-11.
The first investment for the Quality Hospitality Property Fund (QHOP) will be the 18-year-old Amari Boulevard Hotel in Bangkok.
The property fund will purchase the hotel’s leasehold rights under a threeyear sublease with an option to renew up to nine times.
Maris Tarab, the managing director of ING Funds, said the minimum investment would be 2,000 baht for the new fund, which has a dividend policy of 90% of net profits and a projected average internal rate of return of 11.01% per year.
Mr Maris said funds raised from the asset sale would be used to renovate the Amari Boulevard Hotel and also to retire outstanding debt.
ING projects that rental income would generate at least 125 million baht per year for the fund.
The hotel reported total revenues of 362 million baht last year.
Quality Inn, the hotel ownership company held by the Narula family, has guaranteed minimum rental income of 173 million baht per year for the first two years for the fund and 163 million baht over the following three years.
The 305-room Amari Boulevard is located on two rai on Sukhumvit Soi 5. Average occupancy rate is 75%, with daily rack rates expected to reach 3,954 baht per room next year from 3,695 baht in 2007.
The Narula family, which also owns the Sheraton Grande Sukhumvit hotel, is expected to eventually add the fivestar hotel to the QHOP fund, which could eventually grow to eight billion baht in total capital.
Sources said that the expansion programme would depend on QHOP’s success and if the government scraps existing capital controls on foreign inflows into property funds.
TMB is the sales agent and underwriter for the fund offering.
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