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SZ's first residential REITs launched

Writer: Xia Yuanjie  |  Editor: Zhang Chanwen  |  From: Shenzhen Daily  |  Updated: 2022-09-02

Shenzhen's first public real estate investment trust (REIT) based on subsidized rental housing was listed on Shenzhen Stock Exchange on Wednesday. This is one of China’s first batch of three such REITs floated on market, Shenzhen Special Zone Daily reported.

The application for the REIT, Hotland Shenzhen Anju (HSZA) REIT (Stock Code: 180501), was submitted by Hotland Innovation Asset Management Co., with State-owned Shenzhen Talent Housing Group Co. as the originator.

The launch aims to broaden direct financing channels for enterprises that manage low-rent housing, and increase the supply of affordable apartments to Shenzhen’s residents, the city’s State-owned assets regulator said.

REITs are a collective investment scheme that sells shares in a trust that owns a collection of properties or infrastructure assets. HSZA REITs climbed by the daily limit of 30% on its first day of trading, the company said.

On the same day, residential REITs of Beijing and Xiamen were floated on the Shanghai Stock Exchange.

China began trading its first batch of infrastructure REITs in June last year, forging a unique financial structure to bolster the country’s economic development. As of now, 19 public REITs have been approved in China.

Shenzhen’s municipal authorities have been making unremitting efforts to establish infrastructure REITs focusing on government-supported housing. In 2016, Shenzhen Talent Housing Group, a dedicated organization for talent housing, was set up to lead the nation in the construction of public housing with market-oriented tools.

In the following years, the talent housing group joined hands with Shenzhen Capital Group, launching China’s first rental housing REITs for talents. The Shenzhen government also actively discussed the feasibility of public-raising residential REITs with several State-level ministries.

After nearly five years in the making, HSZA REITs set an example for the development of indemnificatory apartments in terms of policy support, model innovation, and system structuring.

The income-producing properties of HSZA REITs include four affordable housing projects, namely Anju Baiquan Ge in Futian District, Anju Jinyuan in Luohu District, Baoli Xiangbin Yuan in Dapeng New Area and Fenghuang Gongguan in Pingshan District.

The properties are said to be conveniently located in the city’s core and boast complete supporting facilities. The properties have a total area of 134,700 square meters, including 1,830 low-rent apartments.

Shenzhen’s talent housing group has built a total of 161,000 units of low-income apartments and plans to construct one-third of indemnificatory housing across the city during the 14th Five-Year Plan period between 2021 and 2025.