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REITs lack charm due to unclear taxes

By on Sep 05, 2012 in Property News

Developers have raised more money through property funds this year even though a more flexible type of funds will be allowed next year.

The Securities and Exchange Commission has announced it will allow the setting up of real estate investment trusts (REITs) next year to add more choice to the Thai capital markets and meet international standards.

The REITs will be more flexible for investors and fund managers but their taxes are still unclear.

Win Udomrachtavanich, the chief executive of One Asset Management, said few developers opt to wait for REITS due to unclear taxes.

”Asset transfer tax and tax exemption for institutional investors are the major issues that could affect their costs,” he said.

”But developers can set up property funds now and change them to REITs later once they are allowed.”

An REIT can raise funds and invest more in other assets.

Win Phromphaet, head of the Social Security Office (SSO), said many property funds have been launched this year.

The SSO’s investment criteria include locations, sectors, minimum dividend yields, property managers, fund size and liquidity. The office prefers freehold properties and stable income streams, especially in the office, retail and industrial sectors.

He said once REITs are allowed, they should benefit institutional investors such as SSO.

Most property funds in the market are set up and operated by property developers, but for investors, a mixture of developers and types of property funds will reduce risks.

For the full article, please visit http://www.bangkokpost.com/business/economics/310887/reits-lack-charm-due-to-unclear-taxes

Source : Bangkok Post 5 September 2012

 

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