Citic Securities Gets Approval for China’s First REIT

Citic Securities Co. (600030), China’s largest brokerage by market value, won regulatory approval to issue the nation’s first real estate investment trust, the South China Morning Post reported today, citing a company document.

Citic Securities is seeking to list the REIT, backed by two office buildings worth a combined 5 billion yuan ($807 million) in Beijing and Shenzhen, on the block trading system of the Shenzhen Stock Exchange, the Hong Kong newspaper reported. The China Securities Regulatory Commission approved the private offering in January, the Post said. The product is different from REITS traded overseas, which are sold and traded publicly, it said.

A Hong Kong-based press officer at Citic Securities declined to comment on the report. The CSRC didn’t immediately respond to a faxed query seeking comment. The private REIT project aims to capitalize on Citic Securities’ fixed assets through securitization, President Cheng Boming said in a November speech.

China may allow REITs as part of a loosening of policies on property financing, the official China Securities Journal reported Sept. 17. The CSRC approved last month new-stock sales by two developers, the first the government has allowed by property companies in about four years.

UBS Global Asset Management (China) Ltd. said in August it started a fund that invests in Shanghai’s public rental homes, the first investment product of its kind in China. The fund will convert into a publicly listed REIT in China when the regulator allows it, UBS said.

To contact Bloomberg News staff for this story: Aipeng Soo in Beijing at asoo4@bloomberg.net

To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net Darren Boey, Russell Ward

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