Li Hui, deputy general manager of the Shenzhen Stock Exchange: We are actively studying and formulating the supporting rules for the expansion of public REITs, and it is recommended to study and explore the training of professional REITs managers

21st Century Business Herald reporter Man Le Beijing reported

On October 15, at the 2021 Infrastructure REITs Industry Development Conference in Beijing, Li Hui, member of the Party Committee and deputy general manager of the Shenzhen Stock Exchange (hereinafter referred to as the Shenzhen Stock Exchange), revealed that under the guidance of the CSRC, the Shenzhen Stock Exchange is actively studying and formulating supporting rules for the expansion of the offering, injecting inexhaustible impetus into the sustainable development of REITs.

Li Hui said that the pilot of public REITs has begun to show its role in deleveraging, stabilizing investment and making up for shortcomings. From the perspective of the Shenzhen Stock Exchange, the total fundraising scale of the first four public REITs is 14.37 billion yuan, and the recovery of funds after the strategic placement of the original equity holders is 8.15 billion yuan. The recovered funds are mainly used to repay the debts of existing projects and build new infrastructure, etc., and are invested in the field of making up for shortcomings, forming a virtuous circle of existing assets and incremental investment. Taking Guangzhou Guanghe REITs in Shenzhen as an example, after the issuance of the project, the assets of Guangzhou Jiaotong Investment Group increased by 4.4 billion yuan, the liabilities decreased by 2.6 billion yuan, the asset-liability ratio decreased by 5 percentage points, and the indirect financing space increased by nearly 20 billion yuan.

For the development of the follow-up public REITs industry, Li Hui suggested at the meeting that the normalization of the public REITs pilot can explore a one-stop service mechanism. He said that from the perspective of the first batch of projects, the promotion of infrastructure REITs involves the coordination and communication of various local development and reform, finance, finance, state-owned assets, taxation, housing and other departments, and it will cost a lot of money to communicate one by one. "Local governments can refer to the initial listing of stocks, establish a normalized working mechanism with multi-departmental participation, jointly study and concentrate on solving practical problems such as asset compliance, state-owned asset transfer, tax policies, and equity confirmation in the process of project promotion, regular feedback and summary, reduce the communication costs of original stakeholders, and provide one-stop services in all fields and full cycles for high-quality projects."

Li Hui also believes that the efficient operation and management of public REITs depends on the continuous improvement of the governance mechanism. In the future, we can further explore the combination mechanism of industry and finance, improve the participation enthusiasm of industrial enterprises, study and explore the cultivation of professional REITs managers, and promote the efficient operation of REITs products.

In addition, the sustained and healthy development of public REITs also needs to establish and improve the institutional arrangements for expansion.

"After REITs go public, there is usually a need to expand the size of assets. For REITs managers and enterprises, the efficient and convenient expansion mechanism is conducive to further revitalizing existing assets and making the platform of combining industry and finance bigger and stronger; for investors, reITs expansion is conducive to improving product liquidity, reducing average management costs, and enhancing investment value. According to Li Hui, at present, the Shenzhen Stock Exchange is actively studying and formulating supporting rules for expansion under the guidance of the CSRC.

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