Recently, the General Office of the State Council issued the "Opinions on Further Revitalizing Existing Assets and Expanding Effective Investment" (hereinafter referred to as the "Opinions"), proposing to promote the healthy development of real estate investment trusts (REITs) in the infrastructure sector, further improve the efficiency of recommendation and review, and encourage more A number of eligible infrastructure REITs projects were issued and listed.
Experts believe that with the support of favorable policies, as an important means to revitalize existing assets and expand effective investment, infrastructure REITs are expected to accelerate toward marketization and maturity, and play a more important role in stabilizing growth and promoting development.
Effectively revitalize stock assets
Infrastructure REITs have been a hot spot in the market in recent years.Since the debut of the first batch of 9 public REITs in June 2021, a total of 12 REITs have been listed one after another, involving industrial parks, warehousing logistics, highways and other infrastructure, with a fundraising scale of 45.8 billion yuan.
"Infrastructure public offering REITs have innovated financing channels, solved the problem of 'where does the money for infrastructure investment come from', and provided a sustainable source of funds for infrastructure investment." Deng Haiqing, chief economist of AVIC Fund, said that my country's infrastructure sector has precipitated With a large number of assets, these stock assets can be revitalized through REITs, providing an incremental source of funds for the traditional infrastructure field to supplement shortcomings and new infrastructure investment, and play the dual role of stock revitalization and incremental promotion.
Since the beginning of this year, various work around infrastructure REITs has been advancing rapidly.In March, the China Securities Regulatory Commission stated that it is working with relevant ministries and commissions to further promote the pilot of infrastructure REITs, improve the system and mechanism, and expand the scope of the pilot.In April, the Shanghai and Shenzhen Stock Exchanges respectively solicited opinions on the guidelines for new purchase projects of infrastructure public offering REITs.In May, the State Council executive meeting proposed to revitalize existing assets such as infrastructure through the issuance of real estate investment trust funds.
The "Opinions" make it clear that the efficiency of recommendation and review will be further improved, and more qualified infrastructure REITs projects will be encouraged to be issued and listed.For projects that play an important role in maintaining the stability of the industrial chain and supply chain and strengthening people's livelihood protection, under the premise of meeting the issuance requirements, meeting market expectations, and ensuring that risks are controllable, the requirements such as operation period and income concentration can be further determined flexibly and reasonably .Establish and improve the fundraising mechanism, explore the establishment of a multi-level infrastructure REITs market, etc.
The industry believes that with the support of policies, publicly offered REITs are expected to create a new equity investment market and play a more important role in helping infrastructure development and expanding effective investment.China Asset Management stated that the fundraising mechanism will help improve the institutional construction of my country's public REITs market, accelerate the continuous entry of high-quality stock infrastructure assets into the capital market, and effectively enhance the scale and attractiveness of public REITs products.
"The rapid development of infrastructure REITs is of great significance for revitalizing existing assets and forming a virtuous investment and financing cycle." said Li Zhan, chief economist of China Merchants Fund Research Department. On the one hand, infrastructure REITs have high liquidity and safety, and have high returns. Stability. Under the background of my country's large-scale infrastructure and high asset stock, the issuance of infrastructure REITs can revitalize the stock assets; on the other hand, for infrastructure assets with long-term stable cash flow but lack of liquidity, public REITs can be used for it. Provide a fund exit channel, improve asset liquidity, and invest in new project construction after the return of funds, forming a virtuous circle; in addition, infrastructure REITs enrich the source of funds for infrastructure projects, reduce the cost of government debt, and provide more social capital. Create opportunities for participation, improve the efficiency of capital allocation, and promote the high-quality development of my country's infrastructure construction.
Diversified expansion made progress
Recently, the diversification and expansion of infrastructure REITs has taken a substantial step.On May 27, the General Office of the China Securities Regulatory Commission and the General Office of the National Development and Reform Commission jointly issued the "Notice on Regulating the Work Related to the Pilot Issue of Affordable Rental Housing Real Estate Investment Trusts (REITs) in the Infrastructure Field" to promote affordable rental housing The REITs business was carried out in an orderly manner.
On the same day, the first batch of affordable rental housing REITs projects in the country were officially declared.The REITs project of Xiamen Anju Group Co., Ltd. and the Shenzhen Talent Anju REITs project formally submitted application materials to the Shanghai and Shenzhen Stock Exchanges respectively, and also reported to the China Securities Regulatory Commission on the same day.
"This means that a substantial breakthrough has been made in the expansion of my country's REITs pilot projects, and it is expected that affordable rental housing REITs will be listed within this year." CITIC Securities Research said that affordable rental housing has relatively stable rents and land transfer fees may be reduced or exempted In the future, affordable rental housing REITs may continue to be promoted in first- and second-tier cities.
The Shenzhen Stock Exchange stated that the launch of affordable rental housing REITs has an important role and significance.First, it can provide a source of funds for incremental investment in rental housing and improve the asset-liability structure of local governments.Secondly, it has enriched the types of publicly offered REITs, broadened investment channels for institutions and residents, and guided some private funds to be allocated to rental housing projects with high quality and stable cash flow.In addition, by revitalizing a large number of high-quality assets formed in the early stage of construction, it can help enterprises to quickly withdraw funds, ease the pressure of new project construction, and establish a low-cost, low-leverage business model.
"REITs are an important tool to solve the bottleneck in the development of affordable rental housing, and there is a lot of room for future development." Han Mingfei, a senior researcher at China Credit Trust Investment Research Department, believes that to speed up the development of affordable rental housing REITs, local governments should also give clear long-term Support policies, for example, can provide long-term land supply, tax reduction and exemption, rent subsidies and other policy support for affordable rental housing to ensure that projects meet the conditions of REITs issuance, stabilize project income expectations, and attract more capital to participate.
At present, my country has a large number of high-quality stock infrastructure assets. The market expects that, taking the promotion of affordable rental housing REITs as an opportunity, in the future, infrastructure assets such as water conservancy facilities and data centers that have not yet been covered are expected to accelerate the application for the establishment of REITs products."These infrastructure assets are related to the national economy and people's livelihood. Reasonable operation and management can produce good social benefits. The market-oriented issuance through financial means such as REITs can effectively recover the initial investment and then carry out the construction of new infrastructure projects, improving the efficiency of capital use." CITIC Securities Research said.
Active participation of financial institutions
Since May, many places have successively issued favorable policies to accelerate the development of infrastructure REITs.
Sichuan proposes 11 measures to promote the healthy development of infrastructure REITs; Jiangsu encourages innovation and exploration in wider fields, and actively supports the application for investment subsidy funds within the central budget for reinvestment of recovered funds in eligible new projects; Shanghai proposes to promote more Qualified stock infrastructure projects will issue REITs, select affordable rental housing projects, etc. to carry out REITs pilot projects, and support the revitalization of stock funds for new projects.
The bidding for REITs projects involving water conservancy, industrial parks, rental housing and other fields is also in full swing, with many financial institutions participating.For example, China Southern Asset Management, E Fund Fund, and GF Fund became the bid-winning candidates for the fund manager project of Sichuan Energy Investment Hengjiang Hydropower Station Publicly Offered REITs; Ping An Securities and CITIC Securities became the bid-winning candidates for the general coordinator project of Guangzhou Science City Group’s publicly offered REITs; Gold Company and Guotai Junan Securities became the winning bidders for the Xiangshui Development Infrastructure Public Offering REITs Consulting Service Project.
"China AMC is committed to cooperating with outstanding original stakeholders and operation management institutions, and is actively discussing or promoting the issuance or expansion of new infrastructure projects with relevant companies, striving to launch more high-quality public offering REITs products for investors. ” said China Asset Management.
In general, my country's infrastructure REITs are still in the initial stage of development, and the market mechanism needs to be further improved."At present, the domestic requirements for underlying asset projects are still relatively strict, and there are not many high-quality projects that meet the conditions in the market. At the same time, the tax policy system for infrastructure REITs has not yet been established, and the tax incentives are not clear enough. In addition, investors of public REITs and Operation managers have certain limitations, public investor participation is not high, and product liquidity needs to be improved." Li Zhan said.
Li Zhan suggested that in the future, the screening criteria for underlying assets should be gradually relaxed, and regulations on the transfer of ownership of underlying assets upon expiration of franchise operations should be improved.Improve tax laws and regulations, and clarify the tax incentives involved in the issuance of REITs.And refer to the experience of developed countries, reduce the participation restrictions of public investors, and increase the activity of the product market.
The relevant supporting rules are being gradually improved.Recently, the China Securities Regulatory Commission has instructed stock exchanges to formulate and release the "Newly Purchased Infrastructure Projects (Trial)" to support listed REITs in acquiring assets through fundraising and other means, strengthen the construction of the REITs market, and strive to promote the high-quality development of the multi-level capital market.
The China Securities Regulatory Commission said that in the next step, it will work with relevant departments and units to encourage listed REITs with good operating conditions and performance, stable investment operations, and standardized accounting basic work to carry out expansion business in accordance with the principle of marketization and rule of law. At the same time, it will strengthen market supervision and give full play to REITs play an important role in revitalizing existing assets and expanding long-term funding sources for infrastructure construction.
(Editor in charge: Guan Jing)
