Tesco has announced plans to launch an initial public offering (IPO) of a property fund in Thailand.

The retail giant today (21 September) filed an application to establish the Tesco Lotus Property Fund IPO with the Securities and Exchange Commission (SEC) of Thailand.

The money it is expected to raise will be used to develop Tesco’s local supply chain, refurbish stores and expand the services available at its hypermarkets, as well as at the first Tesco Extra outlet in Thailand, which opened in July.

Tesco has valued the Tesco Lotus Property Fund at more than THB14bn (US$458.9m) and says it will be the largest retail property fund in the country.

It will initially comprise 15 existing shopping malls, each anchored by a Tesco Lotus hypermarket, as well as freehold land and ground leases. Tesco Lotus will continue to lease all 15 hypermarkets from the fund.

A spokesman for Tesco said interest in the IPO has been high. He said: “It’s very early days as it’s not yet been approved and will take some time but we wouldn’t be proceeding unless we felt there to be a positive reaction.”

He added that some of the funding will be invested in customer operations at the Tesco Extra store, as well as “updating the hypermarkets by adding additional services like  mobile phone shops, similar to our work in Europe”.

Tesco CFO Laurie McIlwee said the fund was “a great example of the value we create through our property”.