Trillion Public Offering Reits Floodgates: Fund Companies "Emergency Preparations" Aimed At The First Managers.

The public offering REITs has finally come!

On the evening of April 30th, the China Securities Regulatory Commission and the national development and Reform Commission jointly issued the notice on promoting the pilot work of the real estate investment trust fund (REITs) in the field of infrastructure. At the same time, the China Securities Regulatory Commission (CSRC) has consulted publicly on the guidelines for the public offering of infrastructure investment funds (for Trial Implementation).

REITs is known as "jewel on the crown of real estate finance" and has huge potential market. Referring to the proportion of the public REITs market in the GDP scale, the public RETIs market in China will reach 6 trillion yuan in the future. Some fund industry insiders predict that the public offering of REITs may reach 100 billion levels in the pilot stage.

In twenty-first Century, the economic report reporters interviewed more than 10 fund companies. Some fund companies have been eager to raise public offerings of REITs, while some other fund companies are still waiting.

Itch for a try

Public offering REITs will first open the gate in infrastructure.

  The public offering infrastructure investment fund (hereinafter referred to as infrastructure fund) in the Guidelines refers to more than 80% of the fund assets invested in a single infrastructure asset backed securities, and through the special purpose vehicle such as asset-backed securities and item company, to obtain full ownership or franchise rights of infrastructure projects, and actively operate and manage infrastructure projects to obtain Stabilize the cash flow and allocate more than 90% of the closed-end fund products allocated to investors according to the requirements.

"Simply say" ABS products + public offering ", circulate in the exchange market, buy REITs products just like buying public offerings. For example, a company has the revenue right of toll roads, and split the shares of the company into funds, which belong to equity funds. An insider explained.

Although the Chinese market did not launch the REITs system before, however, based on the urgent demand of the market, the market organization explored through the REITs like mode of the nature of the creditor's rights. At present, the scale of the REITs products issued by the Shenzhen and Shanghai two exchanges is about 400 billion yuan.

"Public offering RETIs has a steady income. The expected revenue range is around 5%-8%, and it is estimated that many institutions will be able to match such assets. An industry insider said, "at present, the average rate of return of the stock infrastructure projects is 80% of the project, the REIT return rate will fall between 6%-12%, and the market acceptance is no problem."

Some analysts believe that the public REITs pilot ice breaking, expanding the scope of investment in public offerings, and because REITs is a low-risk product with stable long-term returns, the first public offering REITs is expected to be sought after by institutional investors.

Many fund companies have been eager to try.

"We will definitely take part in the strategy of public offering REITs, which has great imagination. The investment and Research Department of the company has been preparing for this aspect, including personnel reserves. A fund company in Beijing said.

"Our company is ready to win the REITs business, the product department is preparing products, but there are no departments and recruiting troops yet." A large fund company said.

A person with a public offering qualification, a subsidiary company of Zi Guanzi, said that before and the May Day holiday, they were busy organizing the organizational structure, setting up the Department, setting up the system and docking the system for the infrastructure REITs business.

The fund company that has not yet made preparations has said: "the relevant departments of these two days are going to have a special meeting to study REITs business."

"From now on, many fund companies want to get the first manager qualification." Zhang Ting, a fortune researcher, said.

However, reporters found that most of the fund company's product department said that there was no plan for public offering RETIs at present, after all, the draft guidelines had just landed.

There are also fund companies that are deterred, "the company admits," our company is not too interested. REITs fund is different from the traditional concept of securities investment fund business. REITs funds do real estate investment. Fund companies need to fulfill the responsibilities of infrastructure project operation and management. We do not have experience in this area, nor do we have the corresponding talent pool. Most importantly, we worry that the RETIs of the public offering of infrastructure is not ideal, so let's wait and see.

A fund company believes that the most advantageous company in the public REITs business is not a large fund company, but a large stockbroker shareholder background or a subsidiary company with mature ABS experience, or a securities brokerage company with the qualification of a public offering fund.

Challenges remain

If you want to wear a crown, it will take its weight. The REITs of fund company's layout will face challenges.

Zhang Ting pointed out that "first of all, good projects are hard to find, and the fund companies with stronger strength or certain experience have stronger advantages. Secondly, according to the guidelines, fund companies need to set up independent investment management departments of infrastructure funds, and need 3 or more personnel. In addition, from the perspective of documents, priority will be given to key developed areas, such as Beijing Tianjin Hebei, Yangtze River economic belt, Guangdong, Hongkong and Macau, and so on, which requires experienced personnel to design and screen products.

The Morgan Foundation believes that the key to the landing of infrastructure REITs depends on specific project qualifications. Only high-quality projects with mature and stable returns can attract a large number of retail investors. Low return or public welfare infrastructure will still rely on borrowing.

So, which assets are suitable for issuing infrastructure REITs?

Penghua Fund operates the first public offering REITs in China. It believes that the selection of suitable assets for issuing REITs public offerings should follow three principles: first, to better match the investors' equity investment risk premium, the basic assets need to have a higher return rate; two, the underlying assets must have long-term and stable cash flow; three, the basic assets are marketed, and the rights are flawless, transferable and legal.

According to the above principles, Peng Hua Fund said that the major infrastructures for public offering REITs include: 5G base station, Intercity High Speed Rail and inter city rail transit, new energy vehicle parking / charging pile, big data center, industrial park, industrial logistics park and so on.

In addition, there are still some problems to be solved in the public offering of REITs.

"The rapid and sustained development of REITs in the United States has been mainly driven by its tax policy drive, and tax incentives have become the core driving force for the development of REITs. At present, the REITs pilot notice does not mention the issue of tax incentives and double taxation, and is expected to be further resolved in the future. Penghua Fund pointed out.