ANNUAL REPORT 1 JANUARY 2012 – 31 DECEMBER 2012
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
TRANSLATION This Annual Report is executed in a text using the Thai language which shall be the governing language.
Annual Report For the Period of 1 January 2012 – 31 December 2012 2 T.U. Dome Residential Complex Leasehold Property Fund Abbreviation as “TU-PF” The Asset Management Company ING Funds (Thailand) Co., Ltd Type of the Fund Project Closed-end Property fund Fund Maturity Not Specified Objectives of the Fund Project The objective of the project is to raise funds from general investors, both individuals and juristic persons, locally and internationally. The funds raised will be used to purchase, rent, sub-rent or acquire immovable property and/or leasehold right and/or sub-leasehold right and acquire benefits from such immovable property, including improvement, change, enhancement and/or disposal of assets that the Fund has invested in or acquired, including leasing, subleasing and/or selling or doing any other thing for the benefits of the assets, so as to generate income and remuneration to the Fund and the unitholders, including investment in other properties and/or securities and/or acquisition of other legal fruits thereof by any other means under the securities laws and/or any other applicable laws. Investment of the Fund First Investment The Fund plans to raise funds to invest in the dormitory and service apartment project, which are being constructed on land owned by Thammasat University (Rangsit Campus). The Fund expects that the project will be able to accommodate residential demands of students, lecturers and scholars that have been increasing every year, and to organize dormitories and residence of students and personnel up to standard suitable for control of environment and security. After completion of the construction of the dormitory and service apartment project, the Fund will rent the leased properties from Thammasat University for a tenor of approximately 30 years so as to acquire benefit thereof mainly by subleasing the properties and servicing to students, lecturers and scholars. Preliminarily, Thammasat University will act as the property manager of the dormitories and service apartments for the Fund. The Fund may appoint other property manager
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 3 to manage the commercial areas for shops and recreation areas (if any), e.g. retail shops, supermarkets, restaurants, theater or bowling hall (if any) etc. During the time the dormitory and service apartment project has not yet completed, the Fund will invest money in the government instruments, debt instruments and/or deposits as it may deem appropriate. (Please see the details of “Investment Policy” in the Prospectus) Dividend Payment Policy The Fund Project pays dividend to unitholders at least twice a year. (1) If the Fund reports a net profit in any accounting period, the Management Company shall pay dividend to unitholders at the rate of no less than 90 percent of the net profit not including unrealized profit from appraisal or reviewed appraisal of real estate or leasehold rights to real estate for the said accounting period. (2) If the Fund reports retained earnings in any accounting period, the Management Company may also pay to unitholders dividend from the said retained earnings. Provided that dividend payment under (1) shall not increase the Fund’s accumulated loss for the accounting period when dividend is paid. Dividend payment under (1) and (2) by the Management Company shall be completed within 90 days of the end of the accounting period when dividend is paid. In the event that the Management Company is unable to make payment by the time specified above, the Management Company shall inform unitholders and the Office of the SEC in writing. In consideration of dividend payment, if the dividend per investment unit to be paid during a fiscal year period is lower than or equal to Baht 0.10, the Management Company reserves the right not to pay such dividend for that period whereby such dividend shall be carried forward for payment at the end of the fiscal year period. (Please see the details of “Terms, Policy, and Procedures for Paying Dividends to Unitholders” in the Prospectus)
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 4 Capital of the Fund Project
:
1,065,000,000 Baht
Number of Investment Units
:
106,500,000 million units
Registered Capital of the Fund Project
:
1,042,298,000 Baht
Registered Number of Investment Units :
104,229,800 units
Type of Investment units
:
Holder name specified
Supervisor
:
Thanachart Bank Plc.
Investment Units Registrar
:
ING Funds (Thailand) Co., Ltd.
Fund Advisor
:
-None-
Property Manager
:
Thammasat Property Management Office Interzone Building, 99 Moo 8, Klong Nueng Sub-District, Klong Luang District, Patumthani 12120 Tel (02) 151-2999
The Asset Management Company has prepared and gathered information on the Fund, e.g., prospectus, general information of the funds, properties invested by the Fund, performance results, press releases and dividend payments record, etc., for dissemination to investors. More information can be viewed at www.ingfunds.co.th. Any expenses for preparation and dissemination of said information will be collected from the Fund.
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 5
T.U. Dome Residential Complex Leasehold Property Fund Portfolio Valuation AS at 31 DECEMBER 2012 ASSETS
Market Value (Baht)
1. BANK DEPOSIT 2. P/N, B/E, T-BILL AND BOND PROMISSORY NOTES AND BILLS OF EXCHANGE - DIRECT ISSUE PROMISSORY NOTES AND BILLS OF EXCHANGE - AVAL BOND TREASURY BILL TOTAL 3. INVESTMENT IN PROPERTY PROPERTY LEASEHOLD RIGHTS TOTAL 4. OTHER ASSETS ACCRUED INTEREST OTHER RECEIVABLES DEFERRED CHARGES OTHER ASSETS ACCRUED RENTAL INCOME TOTAL TOTAL ASSETS 5. LIABILITIES ACCRUED FEES AND EXPENSES ACCRUED PROPERTY TAX RENTAL RECEIVED IN ADVANCE SECURITY DEPOSIT OTHER PAYABLES OTHER LIABILITIES TOTAL LIABILITIES TOTAL NET ASSET VALUE NO OF UNITS NET ASSET VALUE PER UNIT
% of NAV
24,896,778.76
2.47%
40,907,873.23 40,907,873.23
0.00% 0.00% 4.06% 0.00% 4.06%
930,000,000.00 930,000,000.00
0.00% 92.23% 92.23%
1,996.01 13,201,439.86 53,060.15 59,949,184.42 73,205,680.44 1,069,010,332.43
0.00% 1.31% 0.00% 0.01% 5.95% 7.27% 106.03%
(9,533,402.21) (15,742,410.12) (5,881,400.00) (14,468,859.00) (14,991,220.64) (73,079.76) (60,690,371.73) 1,008,319,960.70
-0.95% -1.56% -0.58% -1.43% -1.49% -0.02% -6.03% 100.00%
104,229,800.0000 9.6740
UNITS BAHT
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 6
T.U. Dome Residential Complex Leasehold Property Fund Details of Property Invested by the Fund As of 31 December 2012 Chiang Rak Road, Tambon Tha Khlong, Khlong Luang District, Pathum Thani Province Four residential buildings, comprising a 10-storey serviced apartment building with plaza area located on the 1st - 4th floor and three 9-storey dormitory buildings with plaza area located on the 1st - 2nd floor of Dormitory 1-2 and on the 1st floor of Dormitory 3. Each building has one basement connected to each other as parking area. Land Title deed number 1388, total area of 12-2-50 rai of Use Dormitory, Serviced Apartment and Plaza Project Area and Serviced Apartment Basement – Car-parking area Area Invested by the Floor 1 – 3A – Plaza Area Fund Floor 4 - 10 – 232 units Serviced Apartments
Location Project Features
Dormitory 1
Basement Floor 1 - 2 Floor 3 – 9
– Car-parking area – Plaza Area – 392 units dormitory
Dormitory 2
Basement Floor 1 - 2 Floor 3 - 9
– Car-parking area – Plaza Area – 392 units dormitory
Dormitory 3
Lease Period Investment in Property
Appraisal Value Rental and Services Income per year Obligation
Basement – Car-parking area Floor 1 – Plaza Area Floor 2 - 9 – 448 units dormitory From 26 December 2008 to 25 December 2038 (Approximately 30 years) Cost of leasehold right Baht 985,000,000.00 Related acquisition cost Baht 12,446,137.00 Renovation cost Baht 20,700,000.00 Fixed Asset Baht 560,836.52 Total Baht 1,018,706,973.52 Baht 930,000,000 as of 30 November 2012 by Knight Frank Chartered (Thailand) Co., Ltd., by Income Approach From 1 January 2012 to 31 December 2012 equivalent to Baht 103.65 million* None
Remark *The revenue from operating lease contract received from the master sub-lessee is recognized by the straight line method throughout the contract period.
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 7
T.U. Dome Residential Complex Leasehold Property Fund Details of Purchasing and Leasehold of Properties For the Period from 1 January 2012 – 31 December 2012 - None -
T.U. Dome Residential Complex Leasehold Property Fund Property Disposal or Leasehold Rights Transfer For the Period from 1 January 2012 – 31 December 2012 - None -
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 8
T.U. Dome Residential Complex Leasehold Property Fund Dividend Payment and Capital Reduction History Dividend Payment History No. 1 2 3 4 5 6 7 8 9 10* 11 12
Performance Period 11 Oct 06 - 31 Mar 07 1 Apr 07 - 30 Sep 07 1 Oct 07 - 30 Sep 08 1 Oct 08 - 31 Mar 09 1 Apr 09 - 30 June 09 1 Jul 09 - 30 Sep 09 1 Jan 10 - 31 Mar 10 1 Oct 10 - 31 Dec 10 1 Jan 11 - 30 Sep 11 1 Jan 11 - 31 Dec 11 1 Apr 12 – 30 Jun 12 1 Jul 12 – 31 Dec 12
Dividend Payment Total Amount Per Unit 13,028,725.00 0.125 11,465,278.00 0.110 4,481,881.40 0.043 8,129,924.40 0.078 2,084,596.00 0.020 7,296,086.00 0.070 3,126,894.00 0.030 7,296,086.00 0.070 10,422,980.00 0.100 107,356,694.00 1.030 7,504,545.56 0.072 6,566,477.40 0.063
Book Closing Date
Payment Date
30 May 07 30 Nov 07 28 Nov 08 29 May 09 31 Aug 09 30 Nov 09 31 May 10 22 Mar 11 30 Nov 11 14 Mar 12 31 Aug 12 28 Feb 13
12 June 07 12 Dec 07 12 Dec 08 12 Jun 09 14 Sep 09 14 Dec 09 14 Jun 10 30 Mar 11 13 Dec 11 29 Mar 12 12 Sep 12 12 Mar 13
* The dividend payment for the year ended 2011 from January 1, 2011 to December 31, 2011 has included the compensation payment in managing the fund. Capital Reduction History No. Performance Registered Capital Capital Reduction Registered Capital Book Payment Period before Capital Reduction after Capital Reduction Closing Date Total Amount Per Unit Total Amount Per Unit Total Amount Per Unit Date 1 1 Oct 09 – 1,042,298,000.00 10.00 8,025,694.61 0.077 1,034,272,305.39 9.923 19 Mar 10 31 Mar 10 31 Dec 09 Reasons for Capital Reduction Since the Fund has excess liquidity from (1) Unrealized loss from revaluation of leasehold right (2) Amortization of deferred expenses
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 9
T.U. Dome Residential Complex Leasehold Property Fund Property Market Outlook Industry and Competition Analysis Leasing Residential Market near Thammasat University - Rangsit Campus Demand As at first semester of academic year 2012, Thammasat University, Rangsit Campus has total enrollment of 25,228 increasing by 0.53 percent compared to the same period of the previous year. The said numbers can be classified as follows; Students of Thammasat University - Rangsit Campus Level of Study Semester 1/2011 Semester 1/2012 23,316 Bachelor Degree 23,405 Diploma 1,619 Master Degree 1,485 293 Ph.D. 205 Total
25,095
25,228
Source: Website of Office of the Registrar, Thammasat University (http://web.reg.tu.ac.th/registrar/home.asp)
Supply As per the leasing residential market survey near T.U. Dome Residential Complex Project (Chiangrak Road) as of October 2012, there are 34 projects which with a total unit of 13,596. Most of the said projects accomodated 1-3 residences per room which the total supply in this area can support around 27,192 residences (average of 2 residences per room) or 107.79% of the number of main target which are the total student enrollments of Thammasat University, Rangsit Campus in semester 1/2012. Although the existing supply exceeds the number of the students however there are demand from university staffs, teachers and others such as Asian Institute of Technology, National Science and Technology Development Agency including people who comes for academic test or training at the university training center etc. which resulting to high occupancy rates of the projects in this area. Project Type Private Sector – TU Dome Private Sector - Others University Project* Total
No. of Project
No. of Room (approximate)
Total Residence
1 30 3 34
1,232 8,808 3,556 13,596
2,464 17,616 7,112 27,192
Source: Property Manager of the Fund (Thammasat University by Thammasat Property Management Office) * Comprises of Asian Games Dormitories, Thammasat University Rangsit Campus Dormitories or Inside Dormitories and Thammasat University Hospital Dormitories
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 10 Occupancy Rate and Rental Rate The range of rental rate (compared room types that have the lowest rental rate of each project) in this area is varied, ranging from 2,500 – 9,500 Baht per room per month. By classified into 3 group as per the rental rates as shown in the table below, the Fund project stands in the middle group. If there is a major renovation in the future, the project is expected to increase its rental rate to be in lined with the competitors in this tier. Description Number of Project (project) Number of Room (room) Percentage of Total
Range of Rental Rate (Baht per room per month) Less than 5,000 5,000 – 7,499 7,500 – 10,000 10 9 15 7,666 4,404 1,526 56.38% 32.39% 11.22%
Total 34 13,596 100.00%
Source: Property Manager of the Fund (Thammasat University by Thammasat Property Management Office)
Although some projects have high rental rates, but from the appraiser survey, they can still maintain high occupancy which are more than 90%. In addition, most of the existing projects are quite old and there quality is somewhat inferior compared to the new ones which reflected in their rental rates. Thus the projects within this area are competing with each other by their product quality and services rather than pricing strategy. The outlook of residential market for students near Thammasat University, Rangsit Campus remains highly demanded with potential growth as demand for residential units varied in accordance with the number of students. In addition, Thammasat University is one of the top government universities which students would like to register. We can also see that the number of students’ enrollment is increasing continuously. Although new supply might enter into the market in the future as development opportunity from high demand may be seen by the investors, however good land plots such as the location that is not too far from the entrance-exit of the university, the location that has pedestrian bridge across Chiangrak Road in front of it etc., have been developed a lot since last year. From the initial observation of the management company, there are only 2-3 projects being constructed and expected to open in 2013 compared to the opening of approximately 10 projects in 2012. Retail Market near Thammasat University - Rangsit Campus From the market survey as of November 2012, no direct competitors in terms of size and characteristics with T.U. Dome Residential Complex, but there were some examples of occupancy rates and rental rates from indirect competitors located around this area as follows:
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 11 Project name V.K.P. Plaza Privacy Plaza Future Park Rangsit Talaad Thai Plaza Zear Rangsit
Location
Occupancy Rate
Chiangrak Road In Navanakorn Industrial Estate Paholyothin Road Paholyothin Road Paholyothin Road
80% 40% 95% 100% 80%
Rental Rate (approximate*) (Baht per sq.m. per month) 750-833 555-625 900-1,000 440 975
Source: Appraiser and FUTURE PARK Leasehold Property Fund * Excluding anchor tenants and kiosks
Supply in this area are mainly superstores, followed by shopping centers and community malls. Most of them are located in convenient locations which are easily accessed by main roads such as Paholyothin Road, Rangsit-Nakorn Nayok Road and the area where comprising large communities such as area between Klong 2 to Klong 4 with a lot of housing estate projects. The overall occupancy rate in this area remains at high level, around 80% - 100%, with average rents between 440-1,000 Baht per sq.m. per month. The future outlook of the retail market in this are is still on the bright side due to the fact that there are a lot of nearby large scale housing estate projects and universities. In addition, several road networks bring conveniences to this area resulting to a high level of occupancy rate, while rental rate depends on location, composition of the retail center and anchor tenants of each project.
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 12
T.U. Dome Residential Complex Leasehold Property Fund Total Expenses as called from Property Fund For Period from 1 January 2012 to 31 December 2012 Fund's Direct Expense Management Fee1
Amount (Thousand Baht)
% of Net Assets Value
4,067.34
0.40
Trustee Fee1
380.96
0.04
Registrar Fee1
653.07
0.06
2,590.96
0.25
192.71
0.02
1,487.30
0.15
107.15
0.01
44,348.41
4.36
Insurance Premium1
1,174.99
0.12
Asset Appraisal Fee1
246.10
0.02
Advertising Expense1,2
154.71
0.02
Operating Expenses1
321.79
0.03
27.61 55,753.10
0.00 5.48
Property Management Fee1 Auditing Fee1 Engineering Consultant Fee1 Listing Fee - Written Off1 Cost of Rental and Service1
Other Expenses1 Total Expenses
Remark 1. Included VAT 2. Included the preparation and dissemination of information via the website of asset management company
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 13
T.U. Dome Residential Complex Leasehold Property Fund Name List of Fund Manager For the Period from 1 January 2012 to 31 December 2012 No.
Name List of Fund Manager
Property Fund Manager 1 Ms. Siriphen Wangdumrongves * 2 Mr. Suttipan Kreemaha 3 Mr.Khematat Saradatta 4 Ms. Wannapat Nomklom Mutual Fund Manager (Liquidity Portion) 1 Mr. Jumpon Saimala 2 Mr. Monrat Phadungsit 3 Mr. Jaruwat Preepreamkul 4 Ms. Siripun Sutharoj 5 Ms. Linda Ubolriabroy 6 Ms. Patcharapa Mahattanakul 7 Mr. Verayuth Halilamien 8 Mr. Arunsak Charoonwongniramol 9 Ms. Tipwadee Apichaisiri * Termination Date : 6 August 2012
List of Related Persons having transactions with the Funds managed by ING Funds (Thailand) Company Limited For the period from 1 January 2012 to 31 December 2012 No.
List of Related Persons having transactions with Mutual Funds
1
Other management companies where there are shareholders of ING Funds exceeding 5 % of total sold shares
“The investor can inspect the transactions entered into with the related persons of the mutual fund at the management company directly or at the website of the management company (www.ingfunds.co.th) and the Office of SEC (www.sec.or.th)”
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 14
Details of the Return on Investment Receipt Research paper including in-depth report of listed company, industry analysis, trend and outlook, economic and political situation both in domestic and foreign those influence the investment decision. Specific inquiry including the information further than the released research paper that support the investment decision Conference call direct to analyst Pay a visit to present the remarkable issue Report issue or concern of the market and securities during trade hour Organize seminar, related to the remarkable company. In addition, issue and concern situation at that moment, hosted by direct officers including lawyer, government representatives, or management. They all would provide in-depth information in order to make further investment decision. Arrange company visit as request in order to follow the progress of operation or any change that alter the fundamental. The company management would provide the latest information of business and the development of industry. List of the person who provides Soft Commission for the Fund Securities Companies Country Group Securities Public Company Limited Asia Plus Securities Public Company Ltd. Krungsri Securities Public Company Ltd. Bualuang Securities Public Company Ltd. CLSA Securities (Thailand) Ltd. Capital Nomura Securities Public Company Ltd. DBS Vickers Securities (Thailand) Company Ltd. KGI Securities (Thailand) Public Company Ltd. Credit Suisse Securities (Thailand) Ltd. Maybank Kim Eng Securities (Thailand) Public Company Ltd. Thanachart Securities Public Company Ltd. TISCO Securities Company Ltd. Trinity Securities Company Ltd. Phatra Securities Public Company Ltd. T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 15 SCB Securities Company Ltd. Finansia Syrus Securities Public Company Ltd. UBS Securities (Thailand) Ltd. KT Seamico Securities Public Company Ltd. Citicorp Securities Thailand Ltd. TSFC Securities Ltd. Finansa Securities Ltd. CIMB Securities (Thailand) Company Ltd. United Securities Public Company Ltd. Barclays Capital Securities (Thailand) Ltd. Commercial Banks - Domestic Bank of Ayudhya Public Company Ltd. Bangkok Bank Public Company Ltd. CIMB Thai Bank Plc. Kasikorn Bank Public Company Ltd. Kiatnakin Bank Public Company Ltd. Krung Thai Bank Public Company Ltd. Thanachart Bank Public Company Ltd. Land and Houses Bank Public Company Ltd. Siam Commercial Bank Public Company Ltd. Standard Chartered Bank (Thai) Public Company Ltd. Tisco Bank Public Company Ltd. TMB Bank Public Company Ltd. United Overseas Bank (Thai) Public Company Ltd. Commercial Banks – Foreign Branches ABN-AMRO Bank N.V. JPMORGAN Chase Bank, N.A. Oversea-Chinese Banking Corp., Ltd. The Bank of Tokyo-Mitsubishi Ufj, Ltd. Citibank, N.A - Bangkok T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 16 Credit Agricole Corporate & Investment Bank Bangkok Branch The Hongkong and Shanghai Banking Corp., Ltd. Mizuho Corporate Bank, Ltd. Sumitomo Mitsui Banking Corporation BNP Paribas The Bank of Nova Scotia Others Companies Thanachart Capital Public Company Limited
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND
Annual Report For the Period of 1 January 2012 – 31 December 2012 17
T.U. DOME RESIDENTIAL COMPLEX LEASEHOLD PROPERTY FUND