China News Agency, Beijing, June 12, title: Meng Xiaosu: China is expected to overtake in the global REITs market
Author Song Jie
"The REITs exchange is not only an important strategic measure for the Chinese economy to achieve the goal of deleveraging and reducing debt, but also to attract international capital to fully participate in China's real estate stock and incremental market. Macau is an ideal place to develop the REITs market." Meng Xiaosu, a consultant to the Asset Securitization Committee of the China Securities Fund Association and chairman of the China Real Estate Group, who is the "father of China's real estate" and "the godfather of China's REITs," said in an interview with reporters a few days ago.
REITs, the abbreviation of Real Estate Investment Trusts, refer to the use of trusts or other organizational forms to issue income certificates in public or non-public ways to raise funds, and special investment institutions to invest in real estate and other related assets A collective investment plan that manages and distributes the comprehensive income of investment to investors in proportion.
Currently, the United States has the world's largest REITs market, followed by Japan.
Earlier this month, China's first batch of 9 infrastructure REITs projects were reviewed by the Shanghai and Shenzhen Stock Exchanges, and completed strategic placements, public placements, and offline sales, and the issuance in the primary market was completed.
Meng Xiaosu believes that China is expected to achieve corner overtaking in the global REITs market for the following two reasons.
First, China has the world's largest real estate stock assets, including infrastructure and real estate.
According to data from the National Bureau of Statistics, China's cumulative investment in infrastructure from 1995 to 2019 exceeded 140 trillion yuan, with an average annual growth rate of 16%; from 1999 to 2019, China's real estate development investment totaled 110 trillion yuan, with an average annual growth rate of over 20%.
More importantly, under the guidance of the central government's policy of “no speculation in housing and housing, simultaneous rent and sale”, the real estate leasing market has great potential. Real estate companies have begun to transform to a development model of “high turnover and light assets”. Reduce debt ratio.
Secondly, Chinese companies have accumulated a large amount of infrastructure stock assets along the “Belt and Road”. The assets of these infrastructure projects correspond to the high debt of Chinese companies and the large amount of government loans from Chinese financial institutions to the host country. REITs can absorb international capital. Help China escape this "debt trap."
“Promoting the high-quality development of the “Belt and Road” not only refers to the quality of projects, but should also include the quality of investment and capital management.” Meng Xiaosu said that only by absorbing international capital can we truly realize the “Belt and Road” cooperation, joint construction, and development. shared.
Meng Xiaosu told reporters that there are many options for setting up REITs exchanges in China, including Hainan, Shenzhen, Shanghai, etc., but Macau or Hengqin has unique advantages.
On the one hand, Macau is a key link in the Guangdong-Hong Kong-Macao Greater Bay Area. It is possible to establish a public REITs exchange priced in RMB and based on Macau's legal and taxation framework in Hengqin.
The Chief Executive of the Macao Special Administrative Region He Yicheng stated in his first policy address in April 2020 that "Hengqin is expected to be built into a high-quality development zone and a high-quality living area with a high degree of freedom and openness, excellent innovation capabilities, complete urban functions, and a good ecological environment."
On the other hand, Macau is an international free port with global influence and a world tourism and leisure center. It is also one of the very few economies in the world that can maintain a long-term fiscal surplus.
If the SAR government can refer to the experience of the United States, Singapore and other mature REITs markets and introduce relevant tax-free preferential policies, it will inevitably increase the attractiveness of REITs promoters and investors.
It is worth noting that there is currently no legislation in the fields of trusts, funds, etc. in Macau, and there is not much historical burden and restriction when formulating REITs related legal rules. We can fully learn from the experience of the international REITs market and accelerate the research and formulation of complete trusts, funds, and custody And other relevant laws and regulations.
"The full potential of Macau REITs transactions has become an important channel for attracting long-term international capital (pension funds, family trusts, etc.) and domestic asset allocation for domestic residents." Meng Xiaosu said, "This will also help Macau accelerate its integration into the overall national development. Deepen ties with the mainland economy." (End)