Nine Chinese companies, including GLP, have been approved by the Chinese authorities to list a real estate investment trust (REIT) on China’s stock exchanges.
They are the first batch of C-REITs to come to the market under a pilot scheme launched this week - nearly a decade after China first mooted the idea of listed real estate investment trusts to create another source of funding for developers in China.
Seven of the selected group are infrastructure companies. GLP and the state-owned enterprise, Hongtu Innovation Yantian Port Warehousing and Logistics, are the only two logistics companies in the mix.
Five of the REITs, including GLP C-REIT, will list on the Shanghai Exchange and the remaining four in Shenzhen. Collectively, they are raising RMB34bn (€4.36bn). Trading of the C-REITs is expected to start later this month.
IPE Real Assets understands that the GLP vehicle has issued 1.5bn shares at RMB3.89 per share to raise RMB5.84bn.
The initial public offering is already 72% subscribed by cornerstone investors, mostly Chinese financial institutions. GLP is taking a 20% stake. The cornerstone investors include Taikang Life (20%), Shoucheng Holdings (10%), Dajia Investment Holding (8.39%), CICC Wealth Management (8.33%), CCB Trust (3.5%) and China Insurance Investment Fund (1.78%).
GLP C-REIT will own a portfolio comprising seven logistics assets with over 700,000sqm of gross floor area valued at RMB5.3bn.
The Singapore-based industry body, APREA, said China’s REITs were currently backed by infrastructure assets packaged in a mutual fund structure, deliberately picked by authorities to spearhead the country’s recovery from the pandemic.
It said the offering in the region’s largest economy added a “compelling” dimension to the real assets sector in the region.
“Given the sheer size of China’s infrastructure market, its pilot programme for REITs is a prelude to a market that could eventually rival that of the US,” said APREA.
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