Release date: 2022-08-08
Affordable rental housing REITs have accelerated.On the evening of August 8, CICC Xiamen Anju Affordable Rental Housing Closed Infrastructure Securities Investment Fund (“CICC Xiamen Anju REIT”) issued an announcement on the results of the inquiry, which was less than two weeks after it received the issuance approval at the end of July.
According to the announcement, the sale price of CICC Xiamen Anju REIT is 2.6 yuan per unit, and the total amount of funds raised is 500 million units. The total amount of funds raised is expected to be 1.3 billion yuan.In addition, the fundraising period is from August 16 to 17.
“Affordable rental housing is one of the ideal types of assets in the infrastructure field.” Li Yaoguang, deputy general manager of CICC Fund and manager of CICC Xiamen Anju REIT Fund, introduced in an exclusive interview with a reporter from Securities Daily. On the one hand, public REITs can pass The capital market creates a sustainable investment and financing model for affordable rental housing, improves the effective supply of affordable rental housing, and provides the market with more “rooms” for affordable rental housing. On the other hand, the mature and stable stock of affordable rental housing has been “asset IPO” through REITs, so that diversified investors such as institutional investors and individual investors can use the capital market to enjoy the benefits of infrastructure investment. .
According to public information, the underlying assets of CICC Xiamen Anju REIT are two affordable rental housing projects, Yuanbo Apartment and Hengqi Apartment, with a total construction area of 198,600 square meters and 4,665 suites, mainly for young people and newly employed college students. Transitional rental needs of other citizen groups.
As of the end of March 2022, the occupancy rate of Yuanbo Apartment and Hengqi Apartment, the bottom-level asset projects of CICC Xiamen Anju REIT, both reached 99%, with an average rent of RMB 32.35/square meter/month and RMB 30.52/square meter/month, respectively. At the same time, the project operation is mature and stable, the rent is attractive, and the demand is strong. Regarding the dividend distribution that the market is more concerned about, CICC Xiamen Anju REIT’s inquiry results correspond to a forecast cash flow distribution rate of 4.04% (annualized) in 2022 and a forecast cash flow distribution rate of 4.05% in 2023.
Li Yaoguang further introduced, “The project’s income mainly comes from rent. According to Xiamen’s relevant requirements for affordable rental housing rent, the initial rental price must be lower than 95% of the market-oriented rental housing of the same location and quality; each price adjustment cannot be higher. At the same time, affordable rental housing benefits from policy encouragement, and the land acquisition cost of some projects is cheaper than that of market-oriented rental housing. In summary, CICC Xiamen Anju REIT reflects the security of people’s livelihood on the one hand, and the security on the other hand. Rental housing should be more stable than other property-based assets.”
According to public information, the duration of CICC Xiamen Anju REIT is 65 years. Li Yaoguang said that the duration of existence is determined by one year more than the remaining property period of the underlying asset project. REITs are similar to a listed company. In the future development process, they can acquire other affordable rental housing projects that meet the requirements. If the remaining property period of the new assets exceeds 65 years, they can apply to the China Securities Regulatory Commission to change the registration and expand the scope of assets. The registration period, that is, the duration of REITs, can be naturally extended upwards according to the situation of the loaded assets.
It is reported that the asset reserves of Xiamen Anju Group, the original owner of CICC Xiamen Anju REIT, are of high quality and have the potential for continuous expansion and growth. As of March 31, 2022, Xiamen Anju Group has built 18 rental housing projects with a total construction area of over 3.69 million square meters.
Looking ahead, there is huge room for the development of affordable rental housing.according toCICCAccording to the research of China’s reasonable rental housing market, the size of China’s reasonable rental housing market may reach 3 trillion yuan to 4 trillion yuan, which will mainly be concentrated in large and medium cities.
Li Yaoguang said that in the future, CICC will continue to strengthen investment and exploration in the field of public REITs, continuously improve investment and operation management capabilities in practice, and actively explore different types of infrastructure assets.Efforts will be made to realize the continuous and stable operation of assets, protect the legitimate rights and interests of investors, effectively improve investors’ sense of gain, and help the high-quality development of the industry.
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