Property funds remain misunderstood.

PaulRen's picture
Submitted by PaulRen on Tue, 17/12/2013 - 8:17am
Category: 
Industry

 

Dear Mr. Andrew Stoutley, 

Congrats on the informative article today in the BKK Post regarding REIT's in Thailand.

 

Too bad you did not at least mention as well Thai infrastructure funds which will there be more and some larger then most REIT's. Its not just about real estate. Not only the recent Sky Train fund and others,  but large new green energy funds likely to come as well;  selling electricity to the grid...it will be like a hybrid between utility and infrastructure fund.   I believe these will become very popular in the next 2-3-4 years.

 

Best Regards,

Paul Renaud


 

 

Dear Mr. Renaud,

 

Thank you very much for sharing your feedback on our firm’s article on REITs in Friday’s Bangkok Post. We appreciate your comment about the possible growth of Thai infrastructure funds in the years ahead. Although space limitations prevented us from mentioning infrastructure funds in this article, we’ll consider the possibility of devoting a future article to this topic.

 

Many thanks, again, for your constructive comments.

 

Best regards,

Andrew

 

Andrew Stoutley

Director of Administration

Tilleke & Gibbins

 


 

 

Dear Mr. Stoutley,

Thank you for  your  reply back.

Infrastructure funds are a reality, not a "going to happen".  The Sky Train fund was one of the largest such "property" fund to date ever at the time of launching.  Except it was not a property fund, but in infra. fund.   

The problem is most retail investors don't understand well these funds, which in fact have broad investor appeal. Brokers rarely even bother to make even lists of them with their corresponding current yields or, research these beyond just at best put them in a table and call them all "property funds".  Some such funds are just long leased properties' funds, no title deeds owned, and so investors get further confused (if they ask at all), what happens at the end of the lease period.  One of the most successful initial such fund was the TFUND, which at the time brokers said "could not be done".  Yes, I know this, as I was there.   Thai Brokers have little interest spending research on them as people whom invest then don't trade those, a broker's life blood. The press rarely mentions them, except for your good effort but not complete.  :)   

Still, by not digging into more and broadening the scope of what they are and how they work and how to compare the different kinds with different yields, investors will remain confused which means avoid them like an odd product with no price put on it in a supermarket. Often so to their peril as there could be immense investor appeal to balance their ever low interest paying Thai bank savings accounts.

Best Regards,

Paul A. Renaud.