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Thailand Real Estate Investment – REIT Law Faces Hurdles Before Onset

By on Oct 08, 2013 in Property News

Regulations governing the launch of real estate investment trusts (REITs) set for early next year will probably run behind schedule, as a law related to tax incentives for the funds has hit a snag.

Chalee Chantanayinhyong, deputy secretary-general of the Office of the Securities and Exchange Commission (SEC), said tax issues concerning a 7%value-added tax (VAT) and dividend tax the main concerns putting REITs at a disadvantage to property funds have not been settled.

He said no company has applied to introduce a REIT, including Impact Exhibition Management, the flagship of Bangkok Land Plc (BLAND). Impact recently announced a plan to launch the country’s first REIT, the 20-billion-baht Impact Growth REIT, in the fourth quarter.

According to the SEC, new property funds will no longer be launched after fulfilment of the REIT law.

Although the REIT law is apt to be delayed and the deadline for starting a new property fund could be extended, companies wanting to raise funds from property assets can still prepare plans as the end of the year approaches.

In the run-up to REIT regulations, other property developers such as Dusit Thani, TCC Group, Home Product Center and CP Land have announced plans to raise capital through property funds or increase their existing property funds’ size.

Property fund supply is expected to hit 100 billion baht in the fourth quarter of this year.

Source | Bangkok Post 8 October 2013 http://bit.ly/15RR1a7

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