BEIJING, April 11 China's securities regulator
has approved the country's first property trust investment
product, giving developers a new source of funding and investors
an alternative choice amid initial signs of cooling in the
frothy property market.
CITIC Securities Co Ltd, the country's biggest
brokerage, got approval from the China Securities Regulatory
Commission (CSRC) in January to launch a real estate investment
trust (REIT) product valued at 5.2 billion yuan ($837 million),
according to a document seen recently by Reuters.
REITs, which invest mainly in commercial property and pay
rent from their property to shareholders as dividends, will
provide developers with a new avenue for funding, allowing them
to effectively sell finished commercial buildings to investors.
The launch of a REIT comes as China's residential property
market has shown signs of cooling with local governments
tightening controls on speculative buying, and as banks have
made it harder for home buyers and small developers to get
The government has been working on launching REITs for
nearly a decade and a pilot scheme was once suspended in 2009
due to the global financial crisis and a government crackdown on
the property market.
CITIC's REIT targets qualified institutional investors and
will be listed mainly for block trading in the Shenzhen Stock
Exchange, the document showed. Investors will get rent dividends
from two buildings owned by CITIC securities in Beijing and
Last month, China lifted a ban on equity financing for
listed property developers for the first time in four years, a
step that could herald less government intervention in the
sector and ease funding concerns as credit grows tight and the
($1 = 6.2125 Chinese Yuan)
(Reporting By Zhang Xiaochong and Kevin Yao; Editing by