Expand capacity and increase category, speed up the public REITs market and step into the era of 100 billion yuan

As CICC Shandong Expressway REIT ended its fundraising ahead of schedule, the market size of public REITs will soon exceed 100 billion yuan. Since this year, the dividend of public REITs has been stable, and the price of the secondary market has gradually stabilized recently.

Industry insiders believe that with the further improvement of various regulatory policies on the public REITs market and the normalization of the initial issuance and raising of new assets in the future, the public REITs will certainly develop into a trillion blue ocean and become the backbone of high-quality development in the infrastructure field.

The types of underlying assets are increasingly rich

CICC Fund recently announced that as of October 10, 2023, the total number of public investors subscribing to the REIT of CICC Shandong Expressway has exceeded the total number of public offerings due to the enthusiastic subscription of public investors. According to the relevant regulations, the Fund Manager, in consultation with the Fund's financial adviser and the Fund Custodian, decided to terminate the public offering of fund units ahead of time, advance the deadline for subscription of the Fund's public offering of fund units to October 10, 2023, and no longer accept subscription applications from public investors from October 11, 2023.

Based on the fund subscription price of 7.463 yuan, the amount of REIT raised by CICC Shandong Expressway reached 2.9852 billion yuan. Up to now, the initial public offering and raising of REITs that have been listed and traded totaled about 97.5 billion yuan, which means that after the listing of the REITs of CICC Shandong Expressway, the raising scale of the public offering REITs market will exceed 100 billion yuan.

The public REITs market continued to expand, and the underlying asset types became increasingly rich. From the first batch of listed highways, warehousing and logistics, industrial parks and other underlying assets, it has now expanded to affordable rental housing, energy infrastructure and other fields. Wind data shows that among the six public REITs currently queuing for admission, the underlying assets of Harvest Power China Clean Energy REIT and CCB Goldwind Green Power REIT are energy infrastructure; The underlying assets of Huatai Zijin Nanjing Jianye Industrial Park REIT, Boshi Jinkai Industrial Park REIT and E Fund Guangzhou Development Zone High tech Industrial Park REIT are the park infrastructure; The asset type of ICBC Credit Suisse Hebei Expressway Group REIT is transportation infrastructure.

At the same time, the regulatory support policy continues. The National Development and Reform Commission has clearly stated in relevant documents that it is necessary to study the consumer infrastructure issuance infrastructure REITs that support the enhancement of consumption capacity, the improvement of consumption conditions, and the innovation of consumption scenarios. Give priority to supporting urban and rural commercial network projects such as department stores, shopping centers, farmers' markets, and ensure the basic livelihood of the community commercial project issuance infrastructure REITs.

The price in the secondary market gradually stabilized

As a financial product aimed at dividend distribution, public REITs have been paying dividends steadily since this year. As of October 15, 26 of the 28 publicly offered REITs that had been listed had distributed dividends 41 times in the year, with a total dividend amount of 4.657 billion yuan. Among them, there are 14 public REITs with annual dividends of more than 100 million yuan. CICC Anhui Traffic Control REIT and Ping An Guangzhou Guanghe REIT, the two public REITs with expressway as the underlying asset, had the highest dividend amount in the year, 914 million yuan and 516 million yuan respectively.

In addition, the secondary market price of public REITs has gradually stabilized recently. Wind data shows that as of October 15, the prices of 17 publicly offered REITs in the secondary market have risen in the past three months. Among them, the secondary market prices of Huaxia Hangzhou Heda Hi tech Industrial Park REIT and Huaxia Beijing affordable housing REIT have both risen by more than 6% in the past three months, 8.77% and 6.06% respectively; The secondary market prices of Huaxia Fund China Resources Youchao REIT and Huaxia Hefei Hi tech Industrial Park REIT also rose by more than 5%.

In view of the trend of the secondary market, Du Peng, General Manager of Huajin Securities Innovation Asset Management Headquarters, said that with the first public offering REITs listed for more than two years, the market also experienced a significant rise and fall. In the case of the continuous decline of the secondary market in the early stage, some investors continued to be constrained by risk control and stop loss to sell passively, resulting in further decline of the market, and once there was an "irrational" situation of liquidity stampede cycle. At the beginning of July, since the good news that FOF has included the public offering REITs into its investment scope, other voices related to market stability continued to be heard, and the market recovered and stabilized.

Promote the listing of high-quality assets

Looking forward to the future development of the public REITs market, insiders believe that with the gradual increase of listed projects, the enrichment of asset types, and the launch of the first batch of raising, the public REITs market has experienced "irrational" ups and downs, and investors' understanding of public REITs is also changing.

Zhou Lei, vice president of Huajin Securities, said that in the future, we should unswervingly promote the listing of high-quality assets, especially continue to encourage the raising of high-quality assets, and continue to tilt resources to foster the emergence of leading high-quality asset platforms, becoming a benchmark for the whole market. For problematic assets or projects, it is mainly solved by suspending new issuance and raising, starting mergers and acquisitions, and changing managers. To solve the problem of the public REITs market specifically, we must find the real, unique and crucial problems in the market, such as the above-mentioned high-speed asset problem as the representative of the management right, and take the point to area as the breakthrough in practice. Only by resolving one problem by one, can we start from the management right and gradually solve the problem of public REITs market infrastructure.

Recently, the regulatory authorities have also clearly proposed that they will launch practical measures to further promote the normalized issuance of public REITs, accelerate the normalized issuance of REITs and high-quality expansion, and subsequently launch public REITs related indexes and REITs index funds, optimize the REITs valuation system and issuance inquiry mechanism, and cultivate professional public REITs investor groups, Accelerate the connectivity between the REITs market and the Hong Kong market. Huajin Securities said that with the further improvement of various regulatory policies on the public REITs market, the next capital entry and new project issuance, and the normalization of the initial issuance and raising of new assets in the future, the public REITs will certainly develop into a trillion yuan blue ocean, becoming the backbone of high-quality development in infrastructure.

key word: REITs Public offering Raising FOF Capacity expansion