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Real Estate · Trust
Singapore’s sovereign wealth fund GIC and Grandjoy Holdings chosen to create first publicly-listed REIT in China
CKN
2019/04/19 04:00:49
2,601
GIC; Grandjoy Holdings Group; real estate investment trust

Apr 19, 2019 (China Knowledge) - Singapore’s sovereign wealth fund GIC and its Chinese partner, mall operator Grandjoy Holdings Group, have been selected by Chinese securities regulators to be part of a pilot program to create the country’s first publicly-listed real estate investment trust (REIT).

The new program will allow individual Chinese investors to buy shares in rent-yielding properties for the first time and also provide the company with another exit route for their real estate funds’ investments.

China’s commercial real estate operators have long asked for regulators to allow REITs to be listed on the stock exchange, which would allow individual Chinese investors to make returns from the property market without a large capital outlay and for office and mall investors to make quicker exits on their investments instead of having to wait several years to recover their investment.

Previously, REITs in China could only raise funds through collateralizing their properties through asset-backed securities which limited their pool of investors compared to a share offering.

While regulators have yet to provide a timeline of when the first publicly-listed REIT might materialize, things are progressing with the Development Research Centre of the State Council already in talks regarding the first batch of possible REIT products and the Shanghai Stock Exchange also meeting fund managers and securities firms to work out details.

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