Original title: The accelerated development process of consumption infrastructure REITs is expected to stimulate more consumption vitality.
Reporter Xie Ruolin and trainee reporter Mao Yirong.
The first consumer infrastructure REITs will be listed soon. According to wind statistics, as of February 26, 6 consumer infrastructure REITs have been approved, of which 3 have been priced for sale and completed fundraising, namely Huaxia Jinmao Commercial REIT, Jiajin Meimei Consumer REIT, and Huaxia China Resources Commercial REIT, with a total issuance scale of 892.3 billion yuan.
In the meantime, more products are in the pipeline. CICC SCPG Consumer REIT has been approved to raise 357.7 billion yuan. Huaan Bailian Consumer REIT and Huaxia Capital Outlets REIT have been declared and accepted, and have not yet obtained the administrative license notice. In addition, Shouheng Group, Luneng Commercial Management, Rainbow Co., Ltd., Guangzhou Urban Investment Group, etc. have also launched the issuance of consumer infrastructure REITs.
Favorable policies are frequent
The project implementation process has been accelerated
From a policy perspective, in March 2023, the National Development and Reform Commission (NDRC) issued a document to expand public REITs to the field of consumer infrastructure, and study and support the issuance of infrastructure REITs for consumer infrastructure that enhances consumption capacity, improves consumption conditions, and innovates consumption scenarios. In October of that year, the China Securities Regulatory Commission (CSRC) issued the revised Guidelines for Public Offering of Infrastructure Investment (for Trial Implementation), which clearly included "consumer infrastructure such as department stores, shopping malls, and farmers' markets" into the scope of infrastructure.
From the perspective of the underlying assets of current consumer infrastructure REITs, they are mainly concentrated in the commercial real estate fields such as department stores and shopping malls.
More favorable policies will help revitalize the existing consumption infrastructure and make up for the shortcomings of the consumption infrastructure. The Ministry of Commerce has designated 2024 as the "Year of Consumption Promotion", which is foreseeable that under the promotion of policies, consumption will continue to expand and stimulate potential consumption.
In addition, consumer infrastructure REITs projects will enter a new round of high-quality expansion. The China Securities Regulatory Commission issued a letter on the reply to Proposal No. 03037 of the first meeting of the 14th National Committee of the Chinese People's Political Consultative Conference, stating that the China Securities Regulatory Commission will work with the National Development and Reform Commission to actively promote the implementation of qualified consumer infrastructure REITs projects, promote the revitalization of stock assets, expand effective investment and boost consumption.
Song Hongwei, research director of Tongce Research Institute, told the reporter that with the continuous increase in policy support for consumption infrastructure REITs, it will help further improve the quality and efficiency of commercial project operations, promote the iterative upgrading of consumption patterns and consumption scenarios, stimulate the vitality of regional consumption, and promote the recovery and expansion of residents' consumption.
The scale of existing assets is considerable
There is huge room for market development
With the expansion of the industry scale and asset classes, it is expected that more companies will choose to apply for the issuance of consumer infrastructure REITs in 2024, and the development prospects are worth looking forward to. In addition, public REITs provide an effective exit channel for consumer infrastructure investment, realizing a closed loop of "investment, financing, management and withdrawal".
From the perspective of the international mature REITs market, consumer infrastructure REITs account for a high proportion. Guo Xiangyu, research director of the Real Estate Finance Research Center of Tsinghua University's PBC School of Finance, said that according to market research agency Mordorinteligence, the penetration rate of consumer infrastructure REITs in the United States in 2023 will be about 1035%, if calculated by analogy, the scale of China's consumer infrastructure REITs is conservatively estimated to reach 700 billion yuan, and there will be more room for development in the future.
The relevant person in charge of the real estate investment department of AVIC said in an interview with the reporter that compared with other types of REITs, the underlying assets of consumer infrastructure REITs have a higher degree of marketization and more abundant subdivisions, and have broad development prospects.
Among the underlying assets of consumer infrastructure REITs, shopping malls have become an important asset class. "In the scope of the pilot, shopping malls are the most active infrastructure for consumption, with the characteristics of large volume, complex and diverse structure, changeable consumption scenarios and fast updates, large and scattered tenants and varieties, intensive consumption and high frequency, etc., which have high requirements for operators' operational capabilities. The relevant person in charge of the above-mentioned AVIC ** real estate investment department said that from the perspective of the assets of the consumer infrastructure REITs that are currently about to be listed, Huaxia China Resources, Huaxia Jinmao, and CICC SCP are all shopping center assets with strong scarcity.
From the perspective of stock assets, the overall scale of China's shopping malls continues to rise. According to the statistics of Winshang.com Big Data, as of the end of December 2023, 5,827 shopping malls have been opened in China, with a volume of 51.7 billion square meters, the growth rate of stock slowed down to 68%。Meng Jie, an analyst at Xingye**, said in the research report that in general, consumer infrastructure REITs, especially shopping center REITs, have distinctive growth characteristics, and the current valuation is currently in a relatively reasonable range.
In Song Hongwei's view, the scale potential of consumer infrastructure REITs is large, and the two types of assets of high-quality large-scale commercial projects and high-quality characteristic community commercial projects in the core area of the core city are worthy of attention, and their return on investment is generally high. In addition, it is also worth paying attention to whether there will be REITs projects such as farmers' markets and home furnishing stores in the future.