On April 30, 2020, the CSRC and the national development and Reform Commission jointly issued the notice on promoting the pilot work of real estate investment trusts (REITs) in the field of infrastructure (zjf [2020] No. 40). The issuance of CSRC Document No. 40 is an important step in the development of public REITs in China, and also marks the official launch of the pilot work of public REITs in the field of infrastructure. After the issuance of CSRC Document No. 40, the national development and Reform Commission successively issued the notice on doing a good job in the application of infrastructure REITs pilot projects (fgbtz [2020] No. 586) and the notice on doing a good job in the application of the first batch of infrastructure REITs pilot projects, so as to further clarify the area, scope and project application conditions of the pilot projects. After the first batch of public REITs were listed and traded, on July 2, 2021, the national development and Reform Commission issued the notice on further improving the pilot work of real estate investment trust funds (REITs) in the field of infrastructure (fgtz [2021] No. 958) and relevant annexes. Document No. 958 is the summary and system update after the listing practice of public REITs in China. Compared with document No. 586, Document No. 958 promotes the expansion of pilot areas and industry scope of pilot projects. At the same time, the provisions on project scale and project application procedures are different from those previously issued.
From the pilot projects listed in the first batch, the first batch of infrastructure REITs projects cover the industries mainly supported by CSRC Document No. 40, including warehousing and logistics, toll roads, industrial parks and urban sewage and waste treatment. In terms of the location of infrastructure projects, the first public REITs infrastructure projects belong to the areas given priority support by Document No. 40, including Beijing Tianjin Hebei, the Yangtze River economic belt and the Great Bay area of Guangdong, Hong Kong and Macao.
Because the pilot industry scope of infrastructure REITs has a great intersection with the business of urban investment companies, and participating in infrastructure REITs can help urban investment companies revitalize stock assets and reduce leverage and debt ratio, urban investment companies can use their high-quality bottom assets to participate in infrastructure REITs.
According to the data of 2864 selected urban investment companies (the statistical method is the companies that still exist wind caliber urban investment bonds as of November 17, 2021), the industry of the Securities Regulatory Commission to which the urban investment company belongs is mainly divided into 1669 in the construction industry, accounting for 58.27%, 542 in the comprehensive category, accounting for 18.92%, and 137 in the transportation industry, accounting for 4.8%. The industries where the public REITs infrastructure projects intersect with the typical businesses of the urban investment company are mainly concentrated in the construction industry, transportation industry, power, heat, gas and water production and supply industry. In the future, urban investment companies involved in affordable rental housing, parks, transportation and investment, municipal infrastructure construction and other businesses can actively explore infrastructure REITs, use their high-quality projects to obtain funds and reduce debt pressure.
