INETREIT plans 3.2 billion baht capital increase to fund cloud services expansion

INET Leasehold Real Estate Investment Trust (INETREIT) is preparing to increase its capital by up to 3.2 billion baht (US$89 million). This move is anticipated to finance its additional investment in the INET-IDC3 phase 2, managed by Internet Thailand (INET), an information and communication technology infrastructure provider. The decision aims to profit from the growing demand for cloud services in Thailand, a digital transformation hotbed.

The country is currently attracting cloud data centre operators from all over the world, including the US, Japan, China, Singapore, Australia, and India. The Board of Investment (BoI) approved a 13.7 billion baht (US$381 million) investment for NextDC, an Australian data centre operator, to establish a new hyperscale data centre in Bangkok. Additionally, CtrlS Datacentres (Thailand) Co, based in India, has been granted permission by the BoI to invest 5 billion baht (US$139 million) in a new hyperscale data centre, reported Bangkok Post.

As part of INETREIT’s capital increase, it will issue a maximum of 174,476,000 trust units. The subscription will be open to existing unitholders and the general public from March 11-14, with each unit priced at a maximum of 9 baht. The final price details will be announced later on the Stock Exchange of Thailand’s website.

INETREIT’s primary assets include INET-IDC3 phase 1, located in Saraburi province. The trust has acquired leasehold rights to land and purchased office space and equipment at INET-IDC3 phase 1 from INET.

INET-IDC3 phase 2, operational since 2022, focuses on offering cloud services in the platform as a service and software as a service format. In 2022, Phase 2 generated approximately 265 million baht (US$7.37 million); in the first nine months of 2023, it earned 261 million baht (US$7.26 million).

INET will be allowed to lease the assets in the INET-IDC3 phase 2, with the lease being exclusive for 30 years. The lease fee for the project will be adjusted by 2% annually.

Market projections

Data from Merlin’s Solutions International predicts Thailand’s Internet data centre market will grow at a compound annual growth rate of 5% from 2023-2027, reaching 91.7 billion baht in value by 2027, up from 76 billion last year. The public cloud market in Thailand is projected to record double-digit growth annually, reaching 88.7 billion baht by 2027.

INET reportedly had the largest share (12.7%) of the local cloud service provider market in the second half of 2022. The firm has garnered the trust of local enterprises and the government, supporting projects like the e-tax invoice project, the Personal Health Record project, and the Universal Healthcare initiative.

INET expects to generate revenue of 2.4-2.5 billion baht this year, representing a more than 20% increase from last year’s income of 2 billion baht. INET-IDC3 is now at phase 2.2, expected to run at full capacity this year, with the launch of INET-IDC3 phase 3 in Khon Kaen planned for the future for 2 billion baht.

In related news, Thailand aimed to become Southeast Asia’s AI hub by 2027, implementing a cloud-first policy and partnering with tech giants like Huawei. The national AI strategy focused on boosting economic growth and social development.