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Xinhua Finance | Affordable rental housing REITs accelerate the landing | REITs_Sina Finance_Sina.com

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Xinhua Finance | Affordable rental housing REITs accelerate the landing | REITs_Sina Finance_Sina.com


Source of this article: Xinhua Finance, author: Yang Yiren

Release Date: August 5, 2022

According to the current pilot requirements for affordable rental housing, the net recovery funds of related REITs products should be given priority to the construction of new affordable rental housing projects.This will effectively broaden the sources of construction funds, fully attract social funds such as enterprises, financial institutions, and individuals into the affordable rental housing market, and increase the supply of affordable housing.

Xinhua Finance, Shanghai, August 5 (Reporter Yang Yiren) The affordable rental housing REITs are accelerating their implementation. On August 5, the first batch of two affordable rental housing REITs products officially opened for inquiry.

Li Yaoguang, deputy general manager of CICC Fund Management Co., Ltd. (“CICC Fund”) and fund manager of CICC Xiamen Anju Affordable Rental Housing Closed Infrastructure Securities Investment Fund (“CICC Xiamen Anju REIT”), said in an exclusive interview with reporters , The launch of affordable rental housing REITs is of great significance to both my country’s infrastructure public offering REITs industry and the affordable rental housing industry.

Broad prospects for market development

From the perspective of market prospects, the housing rental industry is ushering in the best period of development.

according toXinhuanetThe “2021 Blue Book of Urban Rental Life in China” co-compiled with research institutions shows that in the future, under the combined effect of increasing urbanization rate, growing demand for long-term rentals, and iteration of living concepts of tenants and owners, it is estimated that China’s rental population in 2030 will be It will reach 260 million, and the housing rental market will reach nearly 10 trillion yuan, ushering in the “golden decade” of industry development.

Zhong Zhengsheng, chief economist of Ping An Securities and director of the research institute, previously estimated that the increase in national affordable housing in 2022 will be about 2.3 million units (rooms).

Industrial SecuritiesWang Hangeng, chief economist of the company, said that the construction of affordable rental housing will continue to make efforts in the next few years. Especially in the case of pre-financial efforts in 2022, the construction of affordable rental housing can achieve a “steady growth” effect, and the incremental contribution to the growth rate of real estate investment is expected to reach 1.1% to 1.6%.

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Affordable rental housing is different from the government’s bottom-line public rental housing. Public rental housing gives priority to ensuring the needs of low-income groups and pays more attention to fairness; while affordable rental housing mainly focuses on “sandwich” residents such as homeless new citizens and young people. The purpose is to effectively solve its staged housing problems, not only low prices but also quality, and cost-effectiveness must be considered comprehensively. At present, it is mainly a means for local governments to attract talents.

Taking the upcoming CICC Xiamen Anju REIT as an example, its assets cover two affordable rental housing projects in Jimei District, Xiamen City – Yuanbo Apartment and Hengqi Apartment. The two projects have a total of 4,665 affordable rental housing listings, with a total construction area of ​​about 198,600 square meters.

Pictured: CICC Xiamen Anju REIT – Yuanbo Apartment Project in Jimei District, Xiamen (Photo courtesy of the original owner)

“For the affordable rental housing industry, the successful implementation of publicly offered REITs products is an important starting point for the further development and growth of the industry.” Li Yaoguang, deputy general manager of CICC Fund and manager of CICC Xiamen Anju REIT Fund, said in an exclusive interview with reporters, ” This time, CICC Fund has joined hands with Xiamen Anju Group Co., Ltd. to actively explore and practice REITs governance mechanisms and management models that adapt to the characteristics of the affordable rental housing industry. Industry development provides useful experience.”

According to the current pilot requirements for affordable rental housing, the net recovery funds of related REITs products should be used preferentially for the construction of new affordable rental housing projects, which will effectively broaden the sources of construction funds and fully attract social funds such as enterprises, financial institutions, and individuals to enter the affordable rental housing project. The rental housing market will increase the supply of guaranteed housing.

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Market development prospects are bright

Under the background of domestic policies emphasizing on accelerating the development of affordable rental housing and promoting the solution of outstanding housing problems in big cities, the pilot implementation of affordable rental housing REITs can be said to be at the right time.

Then, what positive benefits can the introduction of affordable rental housing REITs bring to market participants such as industries, enterprises, local governments, and investors?

Li Yaoguang believes that for the housing industry, affordable rental housing REITs can attract more funds to invest in the construction of affordable rental housing by opening up the closed loop of affordable rental housing investment and financing, thereby increasing the effective supply of affordable rental housing. It is of great significance to implement “housing and not speculating” and “housing and living”.

For enterprises, by issuing affordable rental housing REITs, it can help them recover the funds invested in the early stage, and then invest them in the construction of new affordable rental housing projects. Publicly offered REITs can be used as an asset holding and management platform for enterprises, improve the liquidity of assets, and promote the comprehensive development of enterprises through an asset-light operation model.

“The equity-based features of REITs products are highly in line with the financing needs of affordable rental housing companies. From the situation of this REITs pilot project, REITs will become a platform for such companies to list their assets and continue to provide long-term equity funds for companies. Effectively Alleviate the financial pressure on the investment and construction of affordable rental housing, so as to better support the construction of the local housing security system.”CITIC SecuritiesThe relevant person in charge told reporters.

For local governments, the launch of affordable rental housing REITs will help broaden the source of funds for local affordable rental housing construction, which is an important starting point for expanding the supply of local affordable rental housing, and will also be conducive to the healthy growth of the market. Quality development.

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For investors, the launch of affordable rental housing REITs not only enriches their investment options, but also has the opportunity to create better long-term investment returns for investors.

“The rent of affordable rental housing in my country is generally lower than that of market-oriented rental housing of the same quality in the same location, which is conducive to maintaining the occupancy rate at a high level and contributing relatively stable dividends to investors.” Li Yaoguang said.

All in all, the launch of affordable rental housing REITs is conducive to achieving a win-win situation at multiple levels. However, although the overall performance of publicly offered REITs has been remarkable for more than a year since their listing, this is closely related to many factors such as the phenomenon of “asset shortage” in the market, insufficient supply of REITs themselves, and irrational chasing of domestic individual investors.

“The market should rationally view the short-term price performance of REITs, focus on its long-term investment value, and be highly alert to the risk of serious deviation between the price and the value of the underlying assets,” said a REITs investor.

“Of course, the asset management capabilities of fund managers and external management institutions will play an important role in the stability of the underlying asset management. Facing the same changes in the external environment, a professional team can create better returns for investors.” According to Li Yaoguang, “For the majority of investors, choosing REITs products that meet their own risk levels, establishing a value investment concept, paying attention to the long-term dividend value of REITs investment, and avoiding blindly following the trend and hyping will help improve long-term investment sense of gain.”

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