The year 2023 marks the return of LHHOTEL, showcasing its strength. In the first 8 and a half months of the year, LHHOTEL paid dividends of up to 0.88 baht per unit, a higher rate than in 2019 before COVID-19. Since Thailand opened up and the COVID-19 situation eased in the second half of 2022, LHHOTEL has outperformed other hotel groups, particularly the 5-star premium group. This group targets tourists who quickly return and have high purchasing power. LHOTEL, a REIT that invests in premium 5-star hotels in Bangkok, has taken full advantage of the return of tourists. LHHOTEL’s latest performance has shown significant growth, with total assets valued at 12,481 million baht and an average asset utilization rate of 85-90% in the first half of 2023. The company generated a record total income of 568 million baht and a net investment profit of 398 million baht. Dividends of 0.88 baht per unit were paid, resulting in an Annual Yield of about 9.6%, which is higher than pre-COVID levels. Over the last 7-8 years, LHOTEL’s compensation for investors has increased annually. Looking for additional opportunities to create returns, the company is considering new potential locations in Pattaya. The company previously invested in 3 hotel projects in Bangkok. Dr. Natthakawin Jiamchotipattanakul, Senior Director of Infrastructure and Real Estate Mutual Funds Department at Land and Housing Asset Management Company Limited, explained that LHHOTEL aims to create growth by investing in assets with high potential for additional REIT investment. This strategy has been successful as LH Mall & Hotel, the sponsor of LHHOTEL, has a proven track record in property development and management. LHHOTEL is planning to invest in the leasehold rights of two hotels in potential locations in Pattaya. The Pattaya area has significant growth potential as it is a popular tourist city with various attractions, amenities, and events throughout the year. The area is also benefiting from ongoing infrastructure projects. The two hotels in Pattaya, Grand Center Point Space Hotel Pattaya and Grand Center Point Hotel Pattaya, have impressive performances, attracting both Thai and foreign tourists. The occupancy rates in the first half of 2023 were around 91% for both hotels, with average room rates of 5,450 baht and 3,679 baht per night, respectively. Investing in new assets in Pattaya allows LHHOTEL to diversify its risk from its previous concentration in Bangkok. After the investment, the trust’s average leasehold tenure will increase from 18 to 22 years. The Thai tourism situation is also optimistic, with the number of tourists in the first half of 2023 surpassing the whole of 2022. The Tourism Authority of Thailand predicts 25-30 million foreign tourists in 2023 with the support of increasing flights and government policies. Dr. Natthakawin expects the second half of the year to benefit hotels in good locations, and with the high demand and growth trend, the two additional hotels in Pattaya will continue to thrive.
This year 2023 can be considered as the year LHHOTEL will return to show its strength. During the 8 and a half months of 2023, dividends paid up to 0.88 baht per unit, which is considered a higher rate than before COVID-19 in 2019.
After Thailand opened up and eased the COVID-19 situation, in the second half of 2022, the hotel group had an excellent performance and was stronger than other groups. Especially the 5-star premium group because the target customers are tourists who return quickly and have high purchasing power.
LHOTEL is a REIT that invests in premium 5-star hotels in Bangkok. So take full advantage of the return of tourists this time. LHHOTEL’s latest performance has also grown. In the first half of 2023, LHHOTEL has a total asset value of 12,481 million baht, with an average asset utilization rate of 85-90%, generating a record total income of 568 million baht and a net investment profit of 398 million baht.
Until dividends can be paid in 8 and a half months as high as 0.88 baht per unit, which corresponds to an Annual Yield of about 9.6% (referring to the market price of about 11.50 baht), which is already higher than the pre-Covid in 2019 and is the highest ever recorded. During the last 7-8 years of LHOTEL, the compensation has increased every year, from 0.93 baht per unit per year in 2016 to 1.11 baht per unit per year in 2019.
When LHOTEL improves Therefore, we are looking for additional new opportunities to create returns for investors. So consider additional new potential locations in Pattaya. The fund previously invested in 3 hotel projects in Bangkok.
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‘Dr. Natthakawin Jiamchotipattanakul’ Senior Director of Infrastructure and Real Estate Mutual Funds Department Land and Housing Asset Management Company Limited explained that as manager of the LHHOTEL Trust, the way to create growth for LHHOTEL is to look for assets with high potential for additional REIT investment. and generate good returns for investors
This is because LHHOTEL’s sponsor, ‘LH Mall & Hotel or LHMH’, a subsidiary of Land and Houses Public Company Limited, has presented a good ‘Track Record’ for properties that the company is a developer and project manager of. . continued growth in line with tourism trends.
LHHOTEL is therefore preparing to invest in leasehold rights in two additional hotel properties located in potential locations such as the ‘North Pattaya’ area, namely
Grand Center Point Space Hotel Pattaya, a new hotel just opened in 2022, is a large hotel with a total area of approximately 73,057 square meters and an average occupancy rate of 91%. It is popular among Thai family group tourists and foreigners From the space-themed design with various facilities such as a huge Space Water Park, a modern Convention Hall, a spa and a large onsen with a sea view, the first in Thailand. The lease period is approximately 28 years.
Grand Center Point Hotel Pattaya is a large hotel with an area of over 41,022 square meters located in the same building as Terminal 21 Pattaya Shopping Center, surrounded by shops, restaurants, movie theaters, supermarkets, entertainment venues and convenience facilities complete Set to have an average occupancy rate in the first half of 2023 as high as 91% as well, with a rental period of approximately 25 years.
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“Pattaya area is new waters for LHHOTEL” because previously the hotels under LHHOTEL trust were all in Bangkok area, but why did they choose Pattaya?
‘Dr. Natthakawin’ explains that the ‘Pattaya area’ has the potential to grow from being a nearby tourist destination, taking just over an hour from Bangkok. It is a notable tourist city. with various tourist attractions Lots of amenities Famous events and festivals are held continuously, such as music festivals. International Fireworks Festival Marathon
This makes Pattaya always popular as a tourist destination that is ready to welcome both Thai and foreign tourists throughout the year. Including being able to attract training and seminar groups from various companies. You can come in too.
Another thing is that Pattaya will be an area that will benefit from many infrastructure projects that are currently being developed. Whether it is U-Tapao Airport High-speed electric train connecting 3 airports and EEC project
Combined with the outstanding features of the two hotels, such as ‘Grand Center Point Hotel Pattaya’ which is on the Terminal 21 Pattaya shopping mall and only 500 meters from Pattaya beach and ‘Grand Center Point Space Hotel Pattaya’ The first and only space le- themed design in Thailand. With a water park and 4 play zones on an area of over 12,000 square metres, a large conference centre. The inclusion of Thailand’s first sea view spa and onsen makes the new LHHOTEL property in Pattaya even more attractive.
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In addition to the location and the amenities that guarantee the quality of the two new assets, the ‘performance’ of the two hotels is impressive.
Because it is a hotel that is very popular with Thai and foreign tourists. Make a good income Because it can meet the needs of different customer groups. and it also provides value and premium
During the first half of 2023, ‘Grand Center Point Space Hotel Pattaya’ had an average occupancy rate of 91% and an average room rate of 5,450 baht per room per night. Excluding VAT breakfast income and service charge Can generate a total income of up to 621 million baht
Same as ‘Grand Center Point Hotel Pattaya’ has an average occupancy rate in the first half of 2023 of 91% and an average room rate of 3,679 baht per room per night. Excluding VAT breakfast income and service charge resulting in a total income of more than 322 million baht
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Another interesting thing is that the assets LHHOTEL Trust invested in were all located in the Bangkok location previously, so investing new assets this time will allow the Trust to better diversify risk from the original 100% location in Bangkok. in Pattaya 45% and Bangkok 55%.
according to property in Bangkok location The target group is almost all foreign tourists. And the assets the REIT will invest in are both projects in the Pattaya location. Thus creating a balance in terms of expanding the target audience base and helping to spread more risk. Because hotels in the Pattaya area can attract more target groups of Thai tourists. About 1/3 of the total number of customers are Thais, while foreign tourists are tourists from East and West Asia such as China, Korea, Japan, Hong Kong, Taiwan, and others.
Including the 2 additional hotels invested in, they have different ‘highlights’. This makes it possible to capture a wider range of target groups as well. ‘Grand Center Point Space Pattaya Hotel’ has been able to capture premium customers well since its initial opening, while ‘Grand Center Hotel Point Pattaya’ is also able to capture value – customer oriented.
Another dimension is the ‘leasehold period’ of the assets in which the REIT will invest. Both projects in Pattaya have relatively long rental periods. As a result, after investing in this round, the REIT’s average leasehold tenure will increase from 18 years to 22 years.
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Another important thing is the extremely bright Thai tourism situation. “The number of tourists in the first half of 2023 is already higher than the number of tourists in 2022 for the whole year. Reflecting the clear direction of recovery Even the Tourism Authority of Thailand (TAT) predicts that there will be around 25-30 million foreign tourists in 2023 when combined with positive factors at the end of the year, which is the high tourism season. such as increasing the number of flights Support for new government policies such as free visas for Chinese tourists.”
‘Dr. Natthakawin’ therefore believes that the tourism situation in the second half of the year will benefit hotels with potential in good locations. Although the two additional hotels that LHHOTEL has invested in have already achieved occupancy above 90%, increased demand and the continued growth trend of the tourism industry will help drive room rates to adjust. You can go higher too.
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During the first half of 2023, LHHOTEL’s operating performance has improved quite well. Existing properties in Asoke, Thonglor and Ratchadamri have average occupancy rates similar to pre-Covid levels at around 85%-90% and average room income has increased more than pre-Covid by more than 20% on average. Investing in two additional hotels in Pattaya with occupancy rates above 90% will promote long-term growth. and will continue to increase the source of income for LHOTEL.
In terms of earnings, ‘Dr. Natthakawin’ believes that after additional investment, the maximum value will not exceed 9,400 million baht in 2024 to invest in 2 hotels with high potential by LH Mall and Hotel Company Limited in the group Land and Houses Public Mae Company Limited (LH ) estimates that the return after capital increase is as high as 10.5%.
After 2 assets are added to the stack LHHOEL will make LHHOTEL a REIT similar to a hotel. has the largest asset size and market capitalization on the Stock Exchange of Thailand
Or simply call it that this additional investment will help to promote the strong growth potential of the LHOTEL Trust With a larger income base and will help to expand the group of customers who use the service and change the share of the assets of the trust. Get better risk distribution
Regarding LHHOTEL’s future goals, confirmed ‘Dr. Natthakawin’, after creating inorganic growth by bringing new assets to the stack in this round, that LHHOTEL has a plan to create growth from organic growth, which is to maintain and improve the trust’s assets to be in good condition in order to create growth from the acquisition of benefits and from inorganic growth in allocating investments and preparing to invest in new assets. Expanding investment, creating growth and increasing sources of income for REITs.
“Another highlight is that the LHHOTEL Division has a sponsor such as LHMH, a company in the Land and Housing Group that is a developer and operator of hotels under the “Grand Center Point” brand that specializes in the development and management of assets where REIT invests It makes you believe that can manage the trust’s assets with quality and generate continuous income In addition, the LHMH trust has the opportunity to invest in new assets. Future additions from LHMH who also have new projects. Many more projects are being developed and it is believed that they will come in the pipeline in the future of LHHOTEL, and they can invest further and create growth from new assets as well.
LHHOTEL REIT is considered an alternative to the Property Fund and REIT industry, which currently has around 60 funds. The highlight of LHHOTEL, in addition to being the largest fund in the hotel industry, is There are also hotel managers with potential and Sponsors in the pipeline in the future, causing continued growth for REIT. In addition, Thailand’s tourism industry has a bright outlook compared to other businesses. and has increased significantly since the opening of the country The government sector also considers this industry as a business sector that will help drive the economy. Therefore, this period is considered a good time to invest in hotel REITs.
“We are the largest hotel REIT and we expect support from the recovery of the tourism sector and government policies such as waiving visa fees and increasing flights. This will push LHOTEL to achieve operating results that can pay benefits and returns to unit holders with growth and consistency. In addition, investing in LHHOTEL will benefit from the growth of the tourism industry, which is one of the main industries in Thailand,” said Dr. Natthakawin.
Warning: Understand product features. Conditions of returns and risks before deciding to invest.
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