New | Strong demand for China's monetised products after Penghua Qianhai Vanke Reit
Penghua Reit, the first to receive mainland regulatory approval, plans to raise 3b yuan to invest in a Qianhai office project built by China Vanke
Strong investor response to the Penghua Qianhai Vanke Real Estate Investment Trust Mixed Mutual Fund will encourage more landlords and developers of mainland properties to introduce monetisation moves, say property analysts.
Penghua Reit, the first reit on the mainland, was approved by the China Securities Regulatory Commission on June 8.
The reit is targeting to raise three billion yuan (HK$3.8 billion) from institutional and retail investors and will list on the Shenzhen Stock Exchange after the offering period between June 26 and July 1.
The closed-end fund will invest half in an office project - Enterprise Dream Park in Qianhai - built by China Vanke, the country's top homebuilder. It will reap full rental income from the project from the start of the year to July 2023.
"China will continue to launch this kind of monetised product," said Derek Cheung, chief executive of New Century Asset Management, the manager of New Century Reit, the first China hotel reit.
"They have to," said Cheung, adding that mainland developers need a diversified source of funding from debt and that many Chinese developers wanted to monetise their commercial assets as an exit route.