Thailand Securities and Exchange Commission consults on REIT borrowing cap changes with an interest coverage test and tighter benefit procurement rules

The Thailand Securities and Exchange Commission has opened a public hearing on proposed amendments to the rules governing Real Estate Investment Trusts’ (REITs) borrowing and benefit procurement, with changes intended to increase flexibility, reduce cost burdens and improve clarity. The package, prepared as five draft regulations approved in principle by the Capital Market Supervisory Board, would reset how higher leverage is permitted, expand disclosure of key financial ratios and add a restriction on leasing to certain tenants. Under the proposal, the baseline borrowing cap would remain at 35 percent of total asset value (TAV), while REITs could borrow up to 50 percent of TAV if they maintain an interest coverage ratio (ICR) of at least 2 times, replacing the prior approach that allowed borrowing up to 60 percent of TAV only for REITs with an investment-grade credit rating. Additional disclosures would be required in Form 56-REIT1 and Form 56-REIT2, including ICR and debt service coverage ratio (DSCR), and where borrowing exceeds 35 percent of TAV these ratios would need to be continuously disclosed via the Stock Exchange of Thailand’s information disclosure system (ELCID). If a REIT cannot maintain ICR, it would have to report related risks, mitigation plans and progress updates alongside its financial statement submission; for new unit issuance where borrowing exceeds 35 percent of TAV, the filing would also need to include projected ICR and sensitivity analysis of key factors. Separately, benefit procurement rules would be amended to prohibit leasing properties to tenants reasonably suspected of serious illegal activities or business operations that could materially impact the trust. Comments are requested until 16 February 2026.