What’s new: China’s top economic planner is encouraging private capital to revitalize assets through property rights transactions, mergers and acquisitions, and the purchase and disposal of nonperforming assets.
The National Development and Reform Commission (NDRC) pledged support for eligible private investment projects to raise funds by setting up infrastructure real estate investment trusts (REITs) that trade publicly.
Meng Wei, NDRC spokesperson, said Wednesday at a press conference that the commission will work with related parties to enable more private capital to participate in the construction of major national projects by strengthening services and promoting financing.
The background: China launched a pilot program for REITs in 2015 and recently expanded it for a second time to include more types of commercial properties as part of a push to increase infrastructure investment amid waning economic growth. As of end of February, there were 25 publicly traded REITs that raised more than 80 billion yuan ($11.65 billion).
Current issuers of publicly traded REITs are mostly large state-owned enterprises. One is China Railway Construction Corp.’s Chongqing Investment unit, which issued an REIT for a local highway project. China Merchants Shekou Industrial Zone Holdings Ltd. issued an REIT for the Shekou industrial zone development project.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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