Since the listing of the first batch of REITs, it has driven the construction of 300 billion yuan of new infrastructure projects.
As of June 17, 2022, a total of 12 infrastructure REITs projects have been listed, with an average increase of about 22.18%.
With stable listing, stable trading, stable operation, and stable expectations, infrastructure public offering REITs have gone through a year of exploration, improvement and innovation in the “Stable Words”.
Since the first batch of infrastructure public offering REITs products were listed on the Shanghai and Shenzhen Stock Exchanges on June 21, 2021, it has driven the construction of 300 billion yuan of new infrastructure projects. The overall pilot work of REITs shows a development trend of initial industrial agglomeration effect, stable and orderly market operation, and stable infrastructure operation. At the same time, with the continuous optimization of the policy environment and the gradual deepening of the awareness of all parties, the role of REITs in reducing corporate debt risks, revitalizing existing assets, and forming a virtuous cycle of investment and financing has become increasingly prominent.
All parties work together to make progress while maintaining stability. Several senior market players said that encouraging more high-quality mature projects with rich asset types to enter the market, expanding the market scale, and promoting the high-quality and sustainable development of the industry will be the goal of the next stage of public REITs.
Improve the market ecology
“The operation is basically in line with market expectations, and the system construction has been steadily and continuously improved.” As for the performance of the first batch of publicly offered REITs, industry insiders commented.
As of June 17, 2022, a total of 12 infrastructure REITs projects have been listed, with an average increase of about 22.18%, and the average daily turnover rate is generally higher than that of mature overseas markets. At the same time, judging from the first annual report handed over by the first batch of REITs products, the performance of infrastructure assets has been excellent, and the actual amount available for distribution is about 1.78 billion yuan.
Behind the good start, the policy “paving the way” is inseparable. On June 29, 2021, the National Development and Reform Commission issued the “Notice on Further Doing a Good Job in the Pilot Work of Real Estate Investment Trusts (REITs) in the Infrastructure Sector”, opening the pilot area to the whole country, expanding the scope of assets, and improving the initial launch and expansion of fundraising. Scale requirements, etc., have promoted the expansion of project assets; on November 17, 2021, the China Banking and Insurance Regulatory Commission issued the “Notice on Matters Related to Insurance Funds Investing in Publicly Raised Infrastructure Securities Investment Funds”, introducing insurance funds into the market and increasing the flow of REITs in the secondary market On January 29, 2022, the Ministry of Finance and the State Administration of Taxation issued the “Announcement on the Pilot Tax Policies for Real Estate Investment Trusts (REITs) in the Infrastructure Field” to clarify the preferential tax policies.
From the point of view, the local governments or development and reform departments of more than ten cities across the country have issued policy documents on REITs, covering Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macao, Chengdu-Chongqing economic circle and other regions, encouraging local enterprises to participate in the pilot program. The Shanghai and Shenzhen Stock Exchanges have also collaborated with government departments and regulatory agencies at all levels to issue and implement the rules for the expansion of infrastructure REITs on May 31, 2022, to simultaneously optimize the expansion mechanism, and to support the revitalization of existing assets and the expansion of effective investment.
Taking the Stock Exchange as an example, due to the relatively new REITs products and limited operating experience of the original owners and fund managers, the Shanghai Stock Exchange, together with the development and reform commissions of various provinces and cities and other institutions, carried out REITs rules training in 31 provinces, autonomous regions and municipalities to explain REITs products to issuers. and relevant rules, market conditions, and serve REITs intending issuers.
Expansion asset type
The listing of the first batch of projects opened the prelude to the exploration and development of public REITs. Benefiting from policy guidance, more and more high-quality mature projects have entered the market one after another, and the types of underlying assets have become increasingly abundant.
At present, there are 12 listed public offering REITs in my country. The projects are distributed in Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong, Hong Kong and Macao. The original stakeholders include central enterprises, local state-owned enterprises and foreign-funded enterprises. The projects raised a total of 45.8 billion yuan, mainly investing in technological innovation. , green development and people’s livelihood and other key areas of infrastructure to make up for shortcomings, effectively help infrastructure construction, and promote the integration of industry and finance and local economic development.
The reporter learned that following the stable listing of the first batch of projects, the Shanghai Stock Exchange promoted the smooth listing of CCB Zhongguancun REIT and China Communications Construction REIT, and continued to focus on energy, ecological environmental protection, municipal construction, affordable rental housing, new infrastructure and other asset fields. Carry out seminars, research, market organization and other work. A few days ago, Xiamen Anju, the first affordable housing rental REITs, officially declared, and this project is the first affordable housing rental REITs in the market.
In addition, there are many public REITs projects “on the way”. According to the data, in addition to the China National Gold Railway Construction Chongqing Yusui Expressway Closed Infrastructure Securities Investment Fund, which was released on June 21, there are currently 5 projects queuing for review. The successful listing of demonstration projects has further enhanced the enthusiasm of enterprises holding high-quality infrastructure assets in various regions and fields, and more than 100 single reserve projects are in progress.
As an important feature of REITs products, the fundraising mechanism is an indispensable link in market construction. Supporting well-functioning REITs to become bigger and stronger through the fundraising mechanism will not only help them acquire assets by issuing additional shares, optimize investment portfolios, promote M&A activities, and truly realize the long-term strategic value and sustainable development capabilities of “asset listing platforms”, but also form Marketization is an important way to survive the fittest, promote a virtuous cycle of investment and financing, and improve the overall market performance of REITs.
Under this consensus, the expansion of REITs has also been put on the agenda by more institutions. For example, the relevant person in charge of CICC Fund said in an interview that in the future, on the premise of meeting policies and regulations, it will select high-quality assets and solidly promote the expansion of REITs.
Help the real economy
The General Office of the State Council issued the “Opinions on Further Revitalizing Existing Assets and Expanding Effective Investment” in May this year, which clearly stated that it is necessary to explore the establishment of a multi-level infrastructure REITs market. This is not only an important measure for the capital market to deepen the financial supply-side structural reform and accelerate the construction of a new development pattern, but also a major innovation to serve the real economy and national strategies.
According to the person in charge of the above-mentioned CICC Fund, the risk-return characteristics of publicly offered REITs are between stocks and bonds, and they are an internationally popular asset allocation category. Its launch can broaden the channels of social capital investment in my country and realize the effective allocation of assets. Specifically: First, infrastructure REITs contribute to the market-oriented operation of infrastructure and improve the efficiency of operation and management. REITs, through the inherent requirements for improving the level of asset operation, force operating enterprises to establish a refined, market-oriented and long-term operation and management mechanism, and introduce sufficient market-oriented competitiveness to help enterprises build core competitiveness in the new situation.
Second, REITs help to achieve high-quality development of infrastructure and provide financing support for the construction of new infrastructure such as 5G, cloud computing, and big data centers. REITs can effectively solve the problem of social capital withdrawal through ownership transfer and listing, meet the investment and financing needs of new infrastructure to a considerable extent, and mobilize resources from all parties to promote the development of new infrastructure and prevent monopoly in local areas.
In addition, REITs can also help reduce the risk of government and corporate debt. Local SOEs issue REITs with infrastructure stock assets, which can recover their investment in advance without increasing debt, thereby reducing macro leverage as a whole.
How to further promote the healthy development of the REITs market? In the exploration of specific paths, the Shanghai Stock Exchange proposes to make efforts from four aspects: first, vigorously expand the project reserve of REITs, broaden the types of infrastructure assets, and step up the launch of private investment projects; The construction of housing system; the third is to promote the implementation of the first batch of REITs expansion projects as soon as possible to further exert its long-term strategic value and sustainable development capability as an asset listing platform; the fourth is to further improve the supporting rules of REITs, improve information disclosure requirements, and improve business process efficiency. Stabilize market expectations.
“Developing the REITs market is not only an urgent need for short-term economic steady growth, but also an inherent need to serve the long-term high-quality development of my country’s economy.” In the eyes of industry insiders, it is currently a critical period for the transformation of new and old economic kinetic energy, and the mission of public REITs is on the shoulders, The future is promising.Return to Sohu, see more
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