China Plans to Introduce Real Estate Investment Trust Initial Public Offerings This Year
Liao Shumin
/SOURCE : Yicai
China Plans to Introduce Real Estate Investment Trust Initial Public Offerings This Year

(Yicai Global) May 8 -- China is accelerating the process of securitization of residential rental property assets as real estate and asset management firms introduce relevant projects, China Securities Journal learned. With the maturity of Chinese assets-backed securitization and the gradual improvement of the system, China is close to introduce real estate investment trust, REIT, initial public offerings, it said.

Insiders expect China to introduce REIT public offering pilot projects in the areas of long-term rental apartment and infrastructure in the second half of this year or next year, the report said. The basic design frame is likely to be an integration of real estate securities investment fund, insiders said, adding ABS and the future real estate fund public offering is likely to be in the form of the closed-end securities investment fund.

China's public REITs see the public-funded capital invest in and subscribe to the real estate securitization products, which would be issued in the first-tier markets, said Zhu Gang, head of real estate finance at Huatai Securities.

It is expected that more securitization of residential rental property assets products will emerge as the policy encourages real estate developers to change their operational mode from "development and sales" to "asset holding and operation," the report added.

Editor: Mevlut Katik

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Keywords: Asset-Backed Securitization , Real Estate Investment Trust , Mutual Fund , Quasi-REITs