Destination Capital (DC) has signed an agreement with KTB Securities (Thailand) and MFC Asset Management to capitalise and launch the DESCAP 1 Private Equity Trust, which will acquire hotels in Thailand.
The trust units, which are subject to Securities and Exchange Commission regulations, will be available to both foreign and domestic investors for subscription in October, with target capitalisation of Bt2.5 billion.
The trust has a five-year investment period extendable subject to market conditions by two years, targeting annual returns of up to 15 per cent.
DC will source, acquire, reposition and asset-manage hotels acquired by the trust, with KTB Securities acting as trust settlor and trust manager and MFC as trustee.
The investment strategy is to acquire urban and resort hotels and then renovate, reposition and rebrand to raise their value and generate meaningful returns to investors, utilising Destination Group’s experience gained from its 24-year track record in Thailand of buying, managing and selling hotels – particularly during times of distress.
“We are pleased to play such an important role to support the rejuvenation of the Thai travel and tourism industry with the announcement of the DESCAP 1 Private Equity Trust. This trust will invest in strategic hospitality assets to facilitate re-employment and hotel re-openings to relaunch Thailand as a preferred global travel destination. This could not have been done without the support of our advisor and trust manager, KTBST SEC and MFC as trustee,” said Kaplan.
The trust will give investors the opportunity to participate in the rebound of the Thai hotel and resort industry, he added.
The trust will acquire freehold hotels and resorts located in prime destinations including Bangkok, Pattaya, Hua Hin, and Phuket, as these locations should be the fastest to rebound from the Covid-19 impact.
Fund raising for the trust has two main target investor groups: institutional investors and high net worth individuals.