China’s First Publicly Offered REIT’s Prove Wildly Popular

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The first round of real estate investment trusts (REIT) to be made available to the public via sale on exchanges have proven to be a huge hit with Chinese retail investors.

According to a report from Diyi Caijing the nine publicly offered REIT’s attracted over 30 billion yuan in funds on 31 May, more than 10 times more than the 2 billion yuan in shares initially offered.

While sales of the REIT’s were originally scheduled to run for two to three days starting on 31 May, many issuers announced publicly on the date of launch that sales had concluded in advance due to huge popularity.

The publicly offered REIT’s included:

  1. Zhangjiang REIT (张江REIT),
  2. Yangang REIT (盐港REIT),
  3. Shougang Luneng (首钢绿能),
  4. Guangzhou Guanghe (广州广河),
  5. Shekou Chanyuan (蛇口产园),
  6. Zhejiang Hanghui (浙江杭徽),
  7. Dongwu Suyuan (东吴苏园),
  8. Puluosi (普洛斯),
  9. Shouchuang Shuiwu (首创水务).

Yicai reports that by 11:30 am on 31 May all nine of the REIT’s were oversubscribed, including Shougang Luneng (over 30-fold), Shekou Chanwu (approx. 20-fold) and Shouchaung Shuiwu (11-fold).

“The whole market has just exploded with sales, and the placement ratio was too low,” said one source.

“The reason that the REIT’s were this popular has a lot to do with the underlying standards – for example the quality of China Merchants Shekou (招商蛇口) and Suzhou Industrial Park (苏州产业园) are very good, and it’s the same as investors purchasing property to become landlords or landladies.”

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