[SHANGHAI] China's securities regulator granted approval for the first public sale of units by a real-estate investment trust, broadening the financing channels for developers facing a prolonged housing market slump.
The China Securities Regulatory Commission on Monday approved the Reit managed by Penghua Fund Management which will list in Shenzhen following the offering, according to a person at the company who asked not to be identified. The trust will be made up of commercial properties from China Vanke Co in the southern city of Shenzhen and receive cash flows from rental income, the developer said in an e-mailed statement.
Chinese developers are looking to raise cash as home sales remain weak after a more than yearlong housing market slump. China Resources Land Ltd and Evergrande Real Estate Group Ltd are among listed Chinese homebuilders that raised funds in Hong Kong through share sales last month.
Vanke has been exploring different asset management models, including REITs, Vanke President Yu Liang said at a May 14 briefing in Beijing. The builder tapped the bond market in December after regulators allowed more property companies to access the onshore note market.