The Erawan Hotel Growth Property Fund will launch in the second quarter of this year and will initially invest in the Ibis Phuket Patong and Ibis Pattaya properties.
Siam Commercial Bank has been appointed as fund manager. Erawan’s has broader plans for an expansion through acquisition of three- and four-star properties in the country.
A new subsidiary, Erawan Growth Management Co, has been formed to support the property fund.
According to industry sources, Erawan had previously focused on an asset disposal exercise in order to cash up for its expansion plans, but was unable to transact the two Ibis properties at their anticipated value, hence the shift in strategy to focus on recycling assets through a property fund instead.
Last December Erawan added 378 rooms with its newly opened Ibis and Mercure hotels at the National Stadium in Bangkok.
In addition, a 200-room extension at the Holiday Inn Pattaya and the newbuild 2,010-room Mecure Pattaya, are due for completion at the end of 2014.
In its report on 2012 operating results, one highlight for the group was a 17-per cent uplift of year-on-year occupancy at The Naka Resort. The property had been rebranded by Starwood’s Luxury Collection after starting life under Six Senses.
Last year the resort achieved 43.8-per-cent occupancy with an average room rate of B8,928.
Mr Barnett reports that the property fund sector is likely to see further action in 2013 with “a luxury Phuket resort” looking at injecting a prime asset into a fund later this year.