HONG KONG, Feb 5 (Reuters) - Property developer Country Garden has obtained regulatory approval to launch 10 billion yuan ($1.6 billion) worth of quasi-Real Estate Investment Trusts (REITs), China’s largest so far, as the central government pushes for the growth of the rental housing market.
The regulator approved the issuance of the asset-backed securities on Friday, the Shenzhen Stock Exchange said on a filing on Monday. Country Garden is China’s largest property developer by sales.
The securitisation size is the largest so far in the rental housing industry and the quasi-REITs market. Developers and rental housing operators have been rushing into the securitisation and debt market since the second half of last year to raise funds for the policy-supported but low-return sector.
China announced plans in August to launch pilot programmes in 13 major cities, including Beijing and Shanghai, to build rental housing projects in an effort to ease a housing shortage.
State-owned Poly Real Estate and Shanghai-based CIFI have gained approval to issue 5 billion yuan and 3 billion quasi-REITs respectively for their rental housing projects late last year.
Country Garden has said it aimed to launch one million units of rental apartment in the coming three years. Chief Financial Officer Bijun Wu told reporters on Friday that the profitability of the rental housing business in the short term will be low, so it is expected that the government will roll out supportive measures for market participants. ($1 = 6.2921 Chinese yuan renminbi) (Reporting by Clare Jim; Editing by Miral Fahmy)