REIT Thailand

An indirect investment by a REIT was previously limited to the REIT investing through a shareholding structure of a company which had a freehold or leasehold right over real estate. This was in accordance with the Notification of the Capital Market Supervisory Board No. Tor Jor. 49/2555. Re: Issuance and Offer for Sale regarding Units of Real Estate Investment Trust (“Tor Jor. 49/2555”).

Recent Notifications of the Capital Market Supervisory Board(“CMS”) and the Office of Securities and Exchange Commission (the “SEC”) (“Notifications”) have expanded the scope of permissible indirect investment by REITs. REITs may now indirectly invest in real estate by investing in other Trusts established under Thai law or Foreign law (“Trusts”) in addition to investing through a shareholding structure of a company.

If a REIT makes an indirect investment in real estate through a Trust, the Notifications do not require the REIT to nominate a person to act as a director of the Trusts as would be the case for a REIT that investing through a shareholding structure of a company.

However, the Notifications still require certain mechanisms to ensure that the REIT will have sufficient control over the real estate even if a director will not be appointed to the Trusts. A fundamental requirement of the Notification is that the REIT Manager demonstrates that it has in place supervisory mechanisms for the Trusts over key operational matters. In addition, appropriate approvals from the board of directors of the REIT Manager or the unit holders of the REIT must be required (as applicable) prior to carrying out such key operational matters.

The key operational matters of the Trusts may include the following:

(1) entry into a connected party transaction or any other material transactions;
(2) acquisition, transfer or disposition of the real estate;
(3) amendment of material documents;
(4) ceasing or changing the business operation;
(5) changing of capital structure;
(6) issuing the securities;
(7) borrowing;

The expansion of the scope of permissible indirect investment by REITS through domestic Trusts or international Trusts, would greatly facilitate REITS in diversifying their portfolios and building exposure to real estate markets around the world.

The Notifications, effective from 1 May 2021. as referred to above are:

  1. Notifications of CMS No. Tor Jor. 28/2564 Re: Issuance and Offer for Sale regarding Units of Real Estate Investment Trust (No. 19) (“Tor Jor. 28/2564”), amending Tor Jor. 49/2555 (as amended);
  2. Notifications of the SEC No. Sor Lor. 20/2564 Re: Provisions relating to Particulars, Terms and Conditions in a Trust Instrument of Real Estate Investment Trust (No. 13) (“Sor Lor. 20/2564”), amending Notifications of the SEC No. Sor Lor. 26/2555 Re: Provisions relating to Particulars, Terms and Conditions in a Trust Instrument of Real Estate Investment Trust (as amended); and
  3. Notifications of CMS No. Tor Jor. 29/2564 Re: Rules, Conditions and Procedures for Disclosure of Mutual Fund and Real Estate Investment Trust or Infrastructure Trust (No. 9) (“Tor Jor. 29/2564”), amending Notifications of CMS No. Tor Jor. 20/2561 Re: Rules, Conditions and Procedures for Disclosure of Mutual Fund and Real Estate Investment Trust or Infrastructure Trust (as amended).

If you would like to discuss the issues raised in this article further or related issues, please contact the authors listed below.

Tananan Thammakiat CMHM IHC

Tananan Thammakiat

TEL+66-2-009-5000 Ext. 3202

Tanaporn Rattanapichetkul

Tanaporn Rattanapichetkul

TEL+66-2-009-5000 Ext. 3204

Tanyamai Thanissranont

Tanyamai Thanissranont

TEL +66-2-009-5000 Ext. 3202

Mai Lertpanyanuch

Mai Lertpanyanuch

TEL +66-2-009-5000 Ext. 3113


Chandler MHM Limited
36th Floor, Sathorn Square, Office Tower, 98 North Sathorn Road , Silom, Bangrak, Bangkok 10500 , Thailand.

Tags: REIT, Thailand
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