Regulators in China announced that they will launch the first ever public real estate investment trust. This is going to receive a government subsidy on the rental housing soon. Further notice followed the State Council to encourage more REITs to go public. Beijing expands the supply of affordable accommodation followed by economic reeling due to the spread of Omicron.
This government-subsidized rental housing would enter a pilot program for REITS in the infrastructure sector. This confirmation was from the China Securities Regulatory Commission and the National Development and Reform Commission. Before, they planned few infrastructural asset priorities trust. Moreover, they include toll roads, warehouses, urban utilities, and sewage. The plants would be in the six business regions: Beijing-Tianjin-Hebei, the Yangtze River Economic Belt, Xiongan New District, the Guangdong-Hong Kong-Macau bay area, and the like.
The project has the backing from the subsidized-rental housing in Xiamen and Shenzhen. CICC and Shenzhen Capital Group would manage it. They have even filed Shenzhen and Shanghai IPO bourses. Regulators are confident that this project could boost the virtuous cycle of funds. The project is for the new affordable rental housing. Moreover it could expand the sources of construction funding.
In addition, the regulators argued that it could prevent and defuse major risks in the real estate industry. Thus they could provide stable and healthy market development. Furthermore, they give a signal that this fund cannot be the allocation for the commercial residential and real estate development. This is because the country needs to allocate the money properly for infrastructure construction, said a Beijing-based analyst. Thus, although private developers could involve these projects to build REITs, it is only applicable for the affordable rental housing.
