China's home rental market is expected to gain more support from the country's ever-growing capital market as China's top securities regulators aimed to shorten the investment return period for Chinese home rental companies, the China Securities Journal reported on Thursday.
The China Securities Regulatory Commission (CSRC), along with the Ministry of Housing and Urban-Rural Development, released a plan on Wednesday to push ahead with asset securitization for home rental projects.
"The asset securitization for home rental projects is an effective way to promote the development of China's home rental market by capitalizing on the stock assets and improving the efficiency of capital utilization," says the plan.
The plan specifies the conditions for the securitization of home rental projects, including clear ownership, a normal operation and a sustainable and steady cash flow, among others.
What's more, these projects are required to meet the relevant quality standards, and the required procedures for filing should also be completed.
The originators of these projects should have no major law violations in the recent two years.
According to the plan, key regions including large and medium-sized cities and the Xiongan New Area, which are supported by special state policies, and the cities under a pilot program of constructing home rental projects on the collectively-owned land used for construction will be prioritized for the promotion of the asset securitization for home rental projects.
The plan is the latest of a series of policies aimed at boosting China's home rental market with financial support since the 19th National Congress of the Communist Party of China held in August 2017.
So far, long-term rental apartment brands and real estate developers including Liveyu, Country Garden, and Yuexiu have raised billions of yuan by issuing quasi-Real Estate Investment Trusts (REITs), a typical asset securitization product for the real estate industry in China's securities market.
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