China to launch infrastructure REITs worth $4.9bn

Out-Law News | 27 May 2021 | 1:30 am |

China has launched its first batch of public real estate investment trusts (REITs) for infrastructure projects. The REITS are worth 30 billion yuan ($4.9bn).

There are nine projects in the first batch of REITs products including two highway projects, three industrial park projects, two warehouse and logistics projects and two green projects.

It is reported that China will initially only allow REITs to invest in infrastructure, which means commercial properties including shopping malls and office buildings cannot be counted as qualified assets.

In April 2020, the China Securities Regulatory Commission (CSRC) and the National Development and Reform Commission (NDRC) jointly issued the Notice on Promoting the Pilot Work Related to Real Estate Investment Trusts (REITs) in the Infrastructure Sector.

Finance expert Kanyi Lui of Pinsent Masons, the law firm behind Out-Law, said: “The launch of infrastructure REITs is an exciting development that could go beyond providing local governments and state-owned enterprises with much needed liquidity. The belt and road initiative offers a potentially huge pipeline of candidates for future infrastructure REITs, and planned linkages with Hong Kong may allow overseas investor participation.”