Dusit Thani sets up US$134m fund for 3 hotels

BANGKOK Shareholders of Dusit Thani PLC have approved a major property management project to have three of its luxury hotels—Dusit Thani Laguna Phuket, Dusit Thani Hua Hin and DusitD2 Chiang Mai—fall under the umbrella of a US$134 million property fund. The company will also dedicate up to one-third of the fund’s investment units and manage the three hotels.

Under the plan, Dusit Thani will acquire the business of Dusit Thani Laguna Phuket from Laguna Resorts & Hotels PCL at a total value of around US$91 million. About 13 acres of land and 12 buildings comprising the resort will be added to the fund.

Dusit Thani has 23 years left on its management contract for Dusit Thani Laguna Phuket.

In addition, to attract investors’ interest in the fund, Dusit Thai Properties PCL will dispose of the assets used in the operation of DusitD2 Chiang Mai, to the property fund in the price range of about US$12 million. The subsidiary will also lease out the assets used in the operation of Dusit Thani Hua Hin for a 30-year term to the property fund, altogether having a total value of about US$32 million.

Dusit will hold up to one-third of issued and distributed investment units in the fund, with the value in the range of about US$35 million. The company will set up a 99.99%-held subsidiary to serve as a special purpose vehicle to support the management of the fund’s assets by leasing or subleasing the assets from the fund and, as the lessee and hotel operator, to engage the company to provide management services to ensure the hotel assets achieve the desired rates of returns.

“Putting the three hotels in the same property fund will make the fund large enough to attract investors from all segments and will allow more liquidity,” says CEO Chanin Donavanik. “In addition, the fact that these hotels are located in three different provinces known as Thailand’s most attractive travel destinations will help reduce future external risks. The fund will also provide the company with added flexibility in terms of business expansion by way of investing in other assets in the best interest of the company’s shareholders.”