Pichit said Thailand was capable of competing in the hospitality and tourism industries, and with the rising trend in property investment worldwide, MFC expects the new fund to be welcomed by foreign investors.

"The trend towards property investment is a global one," he said. "Foreign investors are interested in property funds larger than US$100 million (Bt3.59 billion) in size.

"Investors from the Middle East have lately expressed their intention to invest in Thai real estate. Some have already made the move," he said.

Pichit said further details would be discussed, and if nothing changed, the fund would be launched in next year's first quarter.

MFC also announced yesterday that it would raise the capital of its existing MFC Nichada Thani Property Fund (MNIT) by Bt670 million, in order to invest in two detached-housing projects.

The MNIT, which was launched in July 2005, first invested in two lakeside apartment buildings, and its size grew from Bt710 million to Bt778 million by this past October from the returns generated. Its new underlying assets are expected to generate an average return of 8.1 per cent in each of the next five years.

Meanwhile, the country's largest property fund, the CPN Retail Growth Property Fund (CPNRF), plans to conduct a road show in England and Amsterdam next month, in hopes of attracting more foreign investors and increasing its size by another Bt7.17 billion.

Central Pattana (CPN) executive vice president and chief financial officer Naris Cheyklin said foreign and domestic institutions made up 80 per cent of the fund's existing unit-holders. The fund is currently worth Bt10.92 billion. "Hong Kong and Singaporean investors have already invested in our fund," said Naris. "When the size is boosted up to Bt18 billion, it will become even more attractive to foreign investors, because they will consider investing only in large-sized property funds."

Central Plaza Pinklao will be used as the underlying asset to increase the size of the fund this time, he said. In the future, the fund might be enlarged further by adding more CPN-owned shopping malls or rental space.

Jotika Savanananda, managing director of TMB Asset Management, which is the CPNRF's fund manager, said the fund's expansion would be proposed to unit-holders for their approval, after which both local and international road shows would be organised.

Siriporn Chanjindamanee,

Piyarat Setthasiriphaiboon

The Nation