Sale of dusitD2 Chiang Mai is in line with the REIT’s vision to streamline its property portfolio to improve returns in the new normal while also helping to strengthen the financial structure of the Dusit group.

Dusit REIT Management, the manager of Dusit Thani Freehold and Leasehold Real Estate Investment Trust (DREIT), has approved a resolution to sell dusitD2 Chiang Mai hotel to TCC Hotel Chiangmai Co, Ltd., a subsidiary of Asset World Corporation PLC, for approximately THB 435 million baht.

The sale – which is subject to the approval of unitholders at an Extraordinary General Meeting (EGM) on 27 January 2022 – is part of Dusit REIT Management’s strategy to restructure DREIT’s assets in line with significant market shifts seen during the global pandemic, and ultimately position its portfolio for maximum value creation in the new normal.

dusitD2 Chiang Mai has been part of the Dusit Hotels and Resorts portfolio since 2010, with a total investment of THB 362 million. Considerate management and strategic upgrades have since seen the asset increase in value; the difference of which will be recognised as profit from the sale of the property.

“With the global pandemic continuing to impact all businesses – and especially the travel industry – it is important that we assess our portfolio and adjust it to ensure we can create maximum value for all stakeholders in the months and years ahead,” said Mr Santhor Mudhasakul, Managing Director, Dusit REIT Management. “The sale of dusitD2 Chiang Mai is part of this essential streamlining process, and it brings with it numerous benefits. Alongside profit from the increase in asset value, for example, the sale will enhance our capacity to increase liquidity for the REIT by repaying some loan debt. Money generated from the sale could also be used to invest in property upgrades and/or additional potential assets.”

Ms Suphajee Suthumpun, Group Chief Executive Officer, Dusit Thani Public Company Limited (DUSIT), which manages the asset as a hotel operator, said the sale of the hotel is a win-win situation for all parties as each will be positioned to realise their business goals.

“TCC Hotel Chiangmai has a vision to transform Chang Khlan Road, where the hotel is located, and where it already owns several key assets, into a new tourist attraction which will benefit Chiang Mai overall,” said Ms Suthumpun. “By selling our property, and relinquishing our space, we will be helping them to realise that vision. At the same time, the sale of the property will eradicate the long-term lease payments we are currently scheduled to make to DREIT, thereby improving our debt burden. We will also have the freedom to seek investment opportunities in new hotels with high potential.”

Ms Suthumpun added that, after the sale, the property will continue to operate as dusitD2 Chiang Mai hotel until TCC Hotel Chiangmai is ready to embark on its large-scale project.

“As such, the sale will have minimal impact on our people and our brand,” she said. “And we look forward to maintaining a strong presence in the market.”