ANNUAL REPORT 1 JANUARY 2010 – 31 DECEMBER 2010
T.U. DOME RESIDENTIAL COMPLEX 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 2010 – 31 December 2010
Table of Contents
Page
Statement from the Asset Management Company
1
T.U. Dome Residential Complex Property Fund
2
Portfolio Valuation
5
Details of Property Invested by the Fund
6
Details of Purchasing and Leasing of Properties
7
Property Disposal or Leasehold Rights Transfer
7
Dividend Payment and Capital Reduction History
8
Property Market Outlook
9
Total Expenses as called from Property Fund
12
Name List of Fund Manager
13
List of Related Persons having transactions with the Funds managed by ING Funds (Thailand) Company Limited
13
Details of the Return on Investment Receipt
14
Supervisor Report
17
Auditor Report
18
ING Funds (Thailand) Co., Ltd.
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 2 T.U. Dome Residential Complex 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 PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 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 PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 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
:
Siam City 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 PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 5
T.U. Dome Residential Complex Property Fund Portfolio Valuation AS at 31 DECEMBER 2010 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 Total TOTAL ASSETS 5. LIABILITIES ACCRUED FEES AND EXPENSES 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
16,559,233.23
1.71%
-
0.00% 0.00% 0.00% 0.00% 0.00%
942,700,000.00 942,700,000.00
0.00% 97.62% 97.62%
20,329.44 35,075,810.00 4,805,744.69 605,947.94 40,507,832.07 999,767,065.30
0.00% 3.63% 0.50% 0.05% 4.18% 103.51%
(13,106,860.54) (8,759,250.00) (6,526,960.00) (5,625,024.07) (37,311.33) (34,055,405.94) 965,711,659.36
-1.35% -0.90% -0.68% -0.58% 0.00% -3.51% 100.00%
104,229,800.0000 9.2652
UNITS BAHT
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 6
T.U. Dome Residential Complex Property Fund Details of Property Invested by the Fund As of 31 December 2010 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 for Dormitory 1-2 and on the 1st floor for Dormitory 3. Each building has one basement connecting with each other being used as parking area. Land Title deed number 1388, total area of 12-2-50 rai Dormitory, Serviced Apartment and Plaza Purpose of Use Basement – Car-parking area Serviced Apartment Project Area and Floor 1 - 4 – Retail plaza Area Invested by the Floor 5 - 10 – 216 units Serviced Apartments Fund Basement – Car-parking area Dormitory 1 Floor 1 - 2 – Shopping area Floor 3 - 9 – 392 units dormitory Basement – Car-parking area Dormitory 2 Floor 1 - 2 – Shopping area Floor 3 - 9 – 392 units dormitory Basement – Car-parking area Dormitory 3 Floor 1 – Shopping area Floor 2 - 9 – 448 units dormitory Lease Period From 26 December 2008 to 25 December 2038 (Approximately 30 years) Investment in Cost of leasehold right Baht 985,000,000 Property Related acquisition cost Baht 12,446,137 Renovation cost Baht 20,700,000 Fixed Asset Baht 237,553 Total Baht 1,018,383,690 Baht 942,700,000 as of 15 December 2010 by C.I.T. Appraisal Co., Ltd., Appraisal Value by Income Approach Rental and Services From 1 January 2010 to 31 December 2010 equivalent to Baht 64.214 million Income per year Obligation None Location Project Features
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 7
TU Dome Residential Complex Property Fund Details of Purchasing and Leasing of Properties For the Period from January 1, 2010 – December 31, 2010 - None -
TU Dome Residential Complex Property Fund Property Disposal or Leasehold Rights Transfer For the Period from January 1, 2010 – December 31, 2010 - None -
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 8
T.U. Dome Residential Complex Property Fund Dividend Payment and Capital Reduction History Dividend Payment History No. 1 2 3 4 5 6 7 8
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
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
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
12 June 07 12 Dec 07 12 Dec 08 12 June 09 14 Sep 09 14 Dec 09 14 Jun 10 30 Mar 11
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 PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 9
T.U. Dome Residential Complex Property Fund Property Market Outlook Industry and Competition Analysis Residential Market near Thammasat University (Rangsit Campus) At the end of December 2010 (semester 2, academic year 2010), Thammasat University (Rangsit Campus) had total student enrollments of 21,240, increased by 2.3% compared with the same period last year. The said numbers can be classified as follows; Level of Study
Bachelor Degree Diploma Master Degree Ph.D. Total
TU Students Thammasat University (Rangsit Campus) Semester 2/2009 19,367 1,239 163 20,769
TU Students Thammasat University (Rangsit Campus) Semester 2/2010 19,806 1,270 164 21,240
As per the residential market survey near TU Dome (Chiangrak Road) as of December 2010, most of the projects had occupancy rates of 80% - 100% with the average monthly rental rate of 5,000 – 10,000 Baht, the lowest rate was 3,800 Baht while the highest was 18,000 Baht per month. The projects with high rental rate such as Beam and Brownie with the rates of 12,000 – 13,000 Baht and 6,000 – 9,000 Baht respectively had high occupancy rates of 90 and 100%. The projects within the area competed with each other by their product quality and services more than entering into the price war. The outlook of residential market for students near Thammasat University (Rangsit Campus) remains highly demanded and has a good potential growth as the 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 as well as available land plots around this area, the factors of location, uniqueness of property management such as separated building for male and female, property managed by Thammasat Property Management Office, having retail area and other facilities including reasonable rental rates are still important criteria for the selection process of students and/or their parents. T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 10 Details of Residential Projects near TU Dome No. 1 2 3 4 5
Description No.of Unit Lettable Area (sq.m.) Electricity Rate (Baht/unit) Water Rate (Baht/month) Rental Rate
6 Occupancy Rate 7 Facility Air Conditioner Water Heater Free TV Free Refrigerator Cable System Internet
Project Name Beam Brownie Inter Park Songpichet 91 220 * * 35-46 24/40 28/32 24 6 6 6 5 100 100 25/unit 150 12,000- 6,000/ 9,000 5,000/ 6,000 4,200 13,500 90% 100% * *
U-plus U-House Twin Town * * * 32.5-40 24-38 35 7 7 6 25/unit 25/unit 25/unit 8,300- 5,300-8,900 5,000 18,000 * * *
/ / / / True Free 6 Months
/ / True Monthly
/ / / / True Monthly
/ / / True Monthly
/ True Free 256 K
/ / True Monthly
/ / True Monthly
SUNTA 400 26 6 25/unit 5,000
Na Mor. 150 24 6 25/unit 5,500
VKP 210 17 6 25/unit 3,800
TU Dome 1,232 30 6 100 4,800
80%
100%
85%
83%
/ / True Free 64 K
/ / True Monthly
/ / Cable TV Monthly
/ / Satellite Monthly
* Due to most projects are developed by private companies, so the information is not publicly disclosed. The property manager is trying to seek more information such as number of unit, occupancy rate of some projects.
Annual Report For the Period of 1 January 2010 – 31 December 2010 11 Retail Market near Thammasat University (Rangsit Campus) From the market survey as of December 2010, no direct competitors in terms of size and characteristics with TU Dome, but there were some examples of indirect competitors located around this area as follows; Project name Tesco Lotus Rangsit Carrefour Rangsit Big C Rangsit Pure Place Sammakorn Zear Rangsit
Occupancy Rate 100% 95% 100% 80% 100%
Rental Rate for Shop* (Baht/sq.m./month) 1,000-1,500 1,200-1,500 1,500-2,000 500-700 550-750
Rental Rates for Common Area (Baht/sq.m./month) 3,555 Baht/month n.a. 750 Baht/day n.a. n.a.
* This is the average rent on the 1st floor of each project which has retail spaces of 50 sq.m., excluding rental rate of anchor tenant. Supply in this area is 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 5002,000 Baht /sq.m./ month depending on their locations. The variable subjected to locality within the centers. The projects within good location with high traffic can command higher rents. The future outlook of the retail market near Thammasat University (Rangsit Campus) 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 the location, composition and anchor tenants of each project.
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 12
T.U. Dome Residential Complex Property Fund Total Expen ses as called from Property Fund For Period from 1 January 2010 to 31 December 2010 Fund's Direct Expense Management Fee1
Amount (Thousand Baht)
% of Net Assets Value
2,588.06
0.27
Trustee Fee1
365.54
0.04
Registrar Fee1
621.13
0.06
Property Management Fee1
3,156.92
0.33
Fund's Setting Up Expenses - Written Off1
6,198.22
0.64
Auditing Fee1
371.70
0.04
Engineering Consultant Fee1
457.96
0.05
Listing Fee - Written Off1
107.00
0.01
31,015.61
3.20
Insurance Premium1
1,057.14
0.10
Asset Appraisal Fee1
128.40
0.01
Advertising Expense1,2
145.64
0.02
146.60 46,359.92
0.02 4.79
Cost of Rental and Service1
Operating 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 PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 13
T.U. Dome Residential Complex Property Fund Name List of Fund Manager For the Period from 1 January 2010 to 31 December 2010 No.
Name List of Fund Manager
Property Fund Manager 1 Ms. Siriphen Wangdumrongves 2 Mr. Suttipan Kreemaha 3 Mr. Ruchtana Ruchtidhum * 4 Ms. Wannapat Nomklom Mutual Fund Manager (Liquidity Portion) 1 Mr. Jaruwat Preepreamkul 2 Ms. Siripun Sutharoj 3 Ms. Monchaya Rachatakul 4 Ms. Linda Ubolriabroy 5 Ms. Patcharapa Mahattanakul 6 Mr. Tara Vanalabpattana 7 Mr. Verayuth Halilamien 8 Mr. Arunsak Charoonwongniramol * Termination Date : 15 February 2011
List of Related Persons having transactions with the Funds managed by ING Funds (Thailand) Company Limited For the period from 1 January 2010 to 31 December 2010 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 PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 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 Ltd. Asia Plus Securities Public Company Ltd. Ayudhya 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. TMB Macquarie Securities (Thailand) Ltd. KGI Securities (Thailand) Public Company Ltd. Credit Suisse Securities (Thailand) Ltd. Kim Eng Securities (Thailand) Public Company Ltd. Thanachart Securities Public Company Ltd. TISCO Securities Company Ltd.
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 15 Trinity Securities Company Ltd. Phatra Securities Public Company Ltd. SCB Securities Company Ltd. Finansia Syrus Securities Public Company Ltd. UBS Securities (Thailand) Ltd. KT ZMICO Securities Public Company Ltd. Siam City Securities Company Ltd. Citicorp Securities Thailand Ltd. TSFC Securities Ltd. Finansa Securities Ltd. BT Securities 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 Public Company Ltd. Kasikorn Bank Public Company Ltd. Kiatnakin Bank Public Company Ltd. Krung Thai Bank Public Company Ltd. Thanachart Bank Public Company Ltd. Land and Houses Retail 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.
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010 16 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 Credit Agricole Corporate and Investment Bank - Bangkok 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 PROPERTY FUND
Annual Report For the Period of 1 January 2010 – 31 December 2010
ING FUNDS (THAILAND) COMPANY LIMITED Background The Asset Management Company was registered on November 4, 1996 with a fully paidup registered capital of Baht 100 million. It was granted a license to operate asset management business from the Ministry of Finance under the license number 011/2539 dated January 2,1997. After ING group, a financial services conglomerate with Dutch origin, became the major shareholder; the name of the Asset Management Company was changed to “ING Mutual Funds Management (Thailand) Co., Ltd.” in April 1999 and to “ING Funds (Thailand) Co., Ltd.” in May 2003. At present, ING Funds (Thailand) Co., Ltd. is a member of the ING Group of Netherlands Network - a global banking, insurance, and investment management business operator. Location of the Office ING Funds (Thailand) Co., Ltd. is located at 130-132 Sindhorn Building Tower1, G Floor, and Sindhorn Building Tower 3,15th and 17th Floor Wireless Road, Lumpini, Patumwan, Bangkok 10330. Tel: (02) 688-7777 Fax: (02) 688-7707-8 www.ingfunds.co.th
T.U. DOME RESIDENTIAL COMPLEX PROPERTY FUND