What’s new: China’s second batch of publicly offered infrastructure-focused real estate investment trusts (REITs) have been oversubscribed by institutional investors, showing strong investor enthusiasm.
The Huaxia Yuexiu Expressway (华夏越秀高速) REIT, which is set to be listed on the Shenzhen Stock Exchange, was 43 times oversubscribed by institutional investors, according to a statement released on the bourse Tuesday. The REIT’s offer price was set at 7.1 yuan ($1.11) apiece and it plans to raise 2.1 billion yuan in total, the statement said.
The Jianxin Zhongguancun Industrial Park (建信中关村产业园) REIT scheduled to be traded on the Shanghai Stock Exchange was oversubscribed 55 times by institutional investors, according to a statement released by the bourse on the same day. The trust’s offer price was set at 3.2 yuan apiece and there are plans to raise 2.9 billion yuan.
The background: The offerings are part of the Chinese government’s efforts to introduce private money into infrastructure projects and ease local governments’ heavy debt burden. In June, China’s first batch of publicly offered infrastructure REITs made a strong debut on the Shanghai and Shenzhen exchanges.
Money raised from the Huaxia Yuexiu Expressway REIT will be used to fund an expressway project in Wuhan, the capital of Central China’s Hubei province. The Jianxin Zhongguancun Industrial Park REIT will be used to fund the construction of office buildings in Beijing.
Two other REIT products of the second batch are awaiting regulatory approval. They are Huaxia China Communications Construction Expressway (华夏中国交建高速公路) REIT and Guotai Junan Lingang Dongjiu Intelligent Manufacturing Industrial Park (国泰君安临港东久智能制造产业园) REIT.
Related: China’s Fund Markets Mark New Milestone as Long-Awaited REITs Debut
Contact reporter Tang Ziyi (ziyitang@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
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