Property fund, unlike any other mutual fund, has the objective to raise fund from general investors by issuing investment unit and then invest in real estate, residential project or other property-linked securities allowed by law. The property funds focus on property that yields regular returns rather than buying and developing property for sale or trade.

Under the Securities and Exchange Commission regulation, the property fund in Thailand must be the closed-end fund with the minimum capital size of 500 million Baht. The property funds are classified into 2 types

Both types are also required to invest at least 75% of their net asset value (NAV) in the real estate or the leasehold rights of real estate which must be located in Thailand and be at least 80% constructed. The Property fund does not allow investing in dormant land. The property funds also must hold the property for at least one year.
For the investors, If the property funds yield net profits, the management will have to pay dividends equivalent to at least 90% of the annual net profit to the unit holder.

Trading of Unit trust of Property Fund

Even though the investment unit of the property fund are categorized as unit trust, their business nature and income stream are much similar to regular common stock. In addition, the international markets treat the trading of property fund and real estate investment trust (REITs) as regular equity. The Stock Exchange of Thailand seem its appropriate to treat the trading practice of unit trust of property funds as same as common stock. Thus, the trading regulations of investment unit of the property fund will be as follow:

Trading Board: Main board, Odd lot Board and Big lot board
There will be no trading of unit trust of property funds on the Foreign board since there is no foreign limitation applied to property fund

Price Regulations

Industrial classification

The Stock Exchange of Thailand will categorize the investment unit of property funds in the Property development Sector in order to conform to their source of future cash flow.

Market Capitalization and SET index Calculation

The SET will include the market value and price movement of the unit trust of the property funds in the calculation of SET Market capitalization and SET Index. As reason, the investment unit of property funds are more similar to Equity instrument than the existed mutual fund listed in the SET. Since at least 75% of net asset value of the property fund will be invested in the real estates which are the real economic wealth unlike the mutual fund which invest almost capital in the listed share and financial instruments.