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On June 21, 2021, SZSE's first four publicly offered infrastructure-focused real estate investment trusts (“infrastructure REITs”) were successfully launched. Over the past year, the products were running smoothly and the supporting system was continuously improved. As a result, many investors have been attracted to the market, and various market functions have been gradually brought into play. The initial goal of “starting steadily and starting well” has been achieved.
Asset classes have been further enriched, with greater ability to serve national strategies. To date, five infrastructure REITs have been listed and traded on SZSE, covering mainstream infrastructure types such as ecologic and warehousing logistics. In 2022, SZSE launched the first clean energy REITs to channel resources to strategic areas for peaking carbon emissions and achieving carbon neutrality, accelerated the launch of the first government-subsidized rental housing REITs, and proactively supported the transformation of the real estate sector. The trial program has been continuously expanded in asset types, size and scope.
The preliminary rule system has been established and the market has been running stably. Under the guidance of the CSRC, SZSE has put in place a supporting rule system consisting of "1 Measures + 3 Guidelines + 4 Guides". In 2021, SZSE successively issued the measures for infrastructure REITs business, the guidelines on focuses of review, guidelines for offering and 4 business guides. In May 2022, SZSE released new guidelines for the acquisition of new infrastructure projects, the expansion of fund-raising and other matters in the duration of infrastructure REITs, so as to stimulate market momentum for sustainable development. Meanwhile, SZSE launched the Fund Connect platform to provide a more convenient exit channel for over-the-counter investors and improve the liquidity of the infrastructure REITs market. By the end of June 21, 2022, the closing prices of the 5 infrastructure REITs on SZSE were up by 20.62% on average from the issue prices, the average turnover rate was 1.96%, and the majority of investors are institutional investors.
The depth of services has been enhanced, better supporting the real economy. Proactive measures have been taken to overcome the impact of COVID-19, including online meetings and training sessions via video. Communication with local competent authorities, original stakeholders and market institutions has been strengthened to deepen exchanges and cooperation with all parties in the market and build a consensus on development. Efforts in key projects reserve and market fostering has been enhanced, in a bid to jointly promote the healthy development of REITs market.
Next, in accordance with the CSRC requirements, SZSE will refine the project matchmaking services and bring the market functions into play, so as to revitalize existing assets, promote high-quality development of the infrastructure REITs market, and provide stronger support to national strategies and overall economic and social development. First, SZSE will seek progress while maintaining stability and expand the scope of the REITs trial program. SZSE will accelerate the launch of the government-subsidized rental housing REITs project, encourage infrastructure REITs trial projects from clean energy and new infrastructure sectors, and increase the number of infrastructure REITs projects in industrial parks, expressways, warehousing logistics, ecological and environmental protection, etc. Second, SZSE will improve the supporting rule system. Relevant supporting rules will be improved including the review procedures, submission of project materials and information disclosure; and the issue price inquiry system will be optimized. A knowledge base of laws and regulations about REITs business will be established to conduct research on the legal framework for REITs. Third, SZSE will work to enhance the quality of REITs projects. In addition to routine supervision of the information disclosure of infrastructure REITs, SZSE will provide specified provisions on the operation process and requirements for fund-raising expansion for newly acquired projects, so that the rule system of infrastructure REITs will become better and stronger. Fourth, SZSE will strengthen the effort in fostering services. SZSE will strengthen the matchmaking services, and provide targeted exchange and training activities for infrastructure REITs so as to expand the high-quality project reserve. Fifth, SZSE will facilitate the improvement in investor structure. Measures will be taken to encourage insurance companies, banking and wealth management institutions and public funds to increase allocations to REITs. Ongoing support will be given to QFIIs and RQFIIs for investment in domestic REITs products and to institutional investors such as social security, pension and annuity funds for REITs investment. In addition, professional investor groups will be cultivated, so as to ensure sound development of China's infrastructure REITs market in the long run.
