CPN COMMERCIAL GROWTH LEASEHOLD PROPERTY FUND ("CPNCG") was established with the objectives to raise funds from general investors whether they are natural persons or juristic persons inside or outside the country whereby the money derived from such fund raising shall be utilized to purchase and/or take on leases and/or subleases of immovable properties whereby the Fund shall accept the transfer of ownership and/or leasehold rights and/or sub-leasehold right of immovable properties, and seek benefits from such immovable properties.
CPNCG was listed on the Stock Exchange of Thailand on 21st September 2012 with SCB Asset Management Company Limited ("SCBAM") acting as the Fund Manager and Central Pattana Public Company Limited ("CPN") as the Property Manager.
CPNCG is suitable for the long-term investment that seeks higher return than fixed deposit accounts in form of dividend from investment in properties.
At present, CPNCG has invested in properties as follows;
The Offices at CentralWorld
|Properties||Nature of the Invested Properties|
|Land and Building||
|Utility systems together with accessories and equipment related there to|
|Furniture and equipment||
After the Fund has invested in the properties, the Fund will enter into a sub-lease agreement of the invested properties and service agreement with the tenants, as a sub-lessor and provider of service. Such agreements are standardized whereby terms and conditions are comparable for various tenants, for instance, lease term and service term for majority of agreements is 3 years, requiring tenants to place a deposit as collateral under the agreement, and allowing sub-lessor to terminate the agreement in case of breach of agreement by the tenants. However, such agreement must be agreed upon by both parties.
Moroever, SCB Asset management (the Management Company), as a fund manager, has key objectives to deliver to the unitholders steady and sustainable distributions in long term, while realizing the benefits from continuous improvement and quality enhancement of the invested properties. In order to achieve such objectives, our strategies are as follow;
- Property Management Strategies
- Yield Management and Marketing Strategies
- Operating Effectiveness Improvement
- Continuous Quality Management of the Investment
Important insurance policies relating to the immovable properties and leasehold rights to be initially invested in by the Fund, taken out by TBF4 and/or Central World Co., Ltd. and/or companies in CPN Group, include the following:
- (a) All Risk Insurance
- (b) Third Party Liability Insurance
- (c) Business Interruption Insurance
- (d) Terrorism Insurance
After the Fund invests in the Properties to be Initially Invested in by the Fund, the Fund and/or other sub-lessees and/or TBF4 shall be the Co-Insured and jointly pay the insurance premium for All Risk Insurance mentioned in clause (a) in proportion to the possession of the subleased area and/or the leasable area whereby the Fund shall be the beneficiary from the said All Risk Insurance jointly with the Crown Property Bureau.
In the case of damage arising to the immovable Properties to be Initially Invested in by the Fund, whether in whole or in part, the Crown Property Bureau shall deliver the compensation received from the said insurance to TBF4 to support the expenses in repair or re-construction of the Properties to be Initially Invested in by the Fund in accordance with the terms and conditions in the Master Lease Agreement. Then TBF4 shall deliver such compensation to the Fund for use as expenses in repair or re-construction of the Properties to be Initially Invested in by the Fund in accordance with the terms and conditions of the Sublease Agreements for Office Building made between the Fund and TBF4.
In relation to the insurance policy mentioned in clause (c), the Fund and/or other sub-lessees and/or TBF4 shall jointly pay insurance premium in proportion to the income received while the insurance premium under clause (b) shall be shared in proportion to the possession of the subleased area and/or the leasable area of each person. Payment of the insurance premium under clause (d) shall be shared in proportion to the sum insured under the All Risk Insurance and the Business Interruption Insurance as specified in the Terrorism Insurance in total of each branch which is an insured place as provided in relevant insurance policy.
About 25% of CPNRF's units are held by Central Pattana Public Company Limited, who is also the property manager of the fund.
Unitholders will receive returns in the form of dividends and the capital gains arising from the increase in price of the investment units after they are listed in the Stock Exchange of Thailand. Moreover, unitholders have the rights to receive dividends distributed according to terms and conditions as described in prospectus from units up to, but not exceeding, one third of the total units sold. Unless otherwise stipulated by the Office of the SEC.
Terms, Policies and Procedures for Paying Dividends
It is a policy of the Fund Project to pay dividends to the Unitholders at least twice a year. However, the Management Company may consider paying extra dividends other than dividend payment as aforesaid to the Unitholders as the Management Company may deem necessary and proper.
(1) In the case that the Fund realizes a net profit in any accounting period, the Management Company shall pay dividends to the Unitholders not less than 90% of the net profit, not including the profits not yet realized from the appraisal or review of appraisal of the immovable properties and leasehold rights during such relevant accounting period;
(2) In the case that the Fund realized retained earnings in any accounting period, the Management Company may also pay dividends to the Unitholders from such retained earnings.
Payment of dividends under (1) shall not increase retained loss in such accounting period.
In payment of dividends under (1) and (2), the Management Company shall make such payment to the Unitholders within 90 days from the last day of relevant accounting period. In the case that the Management Company is unable to pay dividends within the said period of time, the Management Company shall notify the Unitholder via the Stock Exchange of Thailand and give a written notice to the Office of the SEC.
In considering the payment of dividends, if the dividend per Investment Unit to be declared during a fiscal year is lower than or equal to Baht 0.10 per unit, the Management Company reserves the right not to pay those dividends and carry forward those dividends to be paid together with the dividends as of the end of the fiscal year.
With respect to the rules for paying dividends, the Management Company shall comply with those stipulated herewith, unless otherwise amended, added, announced, stipulated, instructed, approved and/or relieved by the SEC, the Office of the SEC and/or any other agency with the power according to law, which the Management Company shall comply accordingly. Also, the aforesaid money may be used in the businesses relating to the operations of the Fund, such as repair of immovable properties or additional investment in leasehold rights, provided that it shall not exceed the power of the Investment Committee or the Management Company and that the Fund shall have a system to manage rental deposit when a lessee exercises the right to demand of a refund of such deposit amount.
Investing in CPNCG bears specific risks as follows:
- (a) Risks arising from operation of the Fund
- (b) Risks associated with capabilities to seek benefits from invested properties
- (c) Risks directly related to the Fund and the unitholders