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Recently, China Asset Management Co., Ltd. announced that China Asset Management Co., Ltd.'s first public REIT with outlet projects as underlying assets will be officially launched from August 6 to August 9, 2024, with an offering price of RMB 2.468 per unit and a total fundraising amount of RMB 1.9744 billion. Among them, 60 million units will be offered to the public, and public investors can subscribe at the offering price through on-site securities operating institutions or fund managers and their entrusted off-site fund sales agencies, with a minimum subscription amount of RMB 1,000 (including subscription fees).

The outlet business is one of the core business segments of Beijing Capital Development (China Capital Real Estate), and it can even be said to be the most high-quality holding asset under Beijing Capital. Since it officially entered this business in 2009, it currently has 15 outlet projects in operation across the country, with a total construction area of ​​approximately 1.8 million square meters.

The underlying assets of the Huaxia Capital Outlets REIT issued this time are two outlet projects under Capital Urban Development Group, namely the Jinan Capital Outlets Project and the Wuhan Capital Outlets Project. Among them, the Jinan project opened in 2019 and has been ranked first in the Jinan outlet market for five consecutive years in terms of sales; the Wuhan project opened in April 2018 and currently occupies about 50% of the market share of the outlet market in the area south of the Yangtze River.

According to the fund's planned fundraising scale and the distributable amount disclosed in the fund prospectus, the distribution rates of China Fortune Outlet REIT in 2024 and 2025 are 5.46% and 5.84% respectively. With relatively stable return expectations, the market has cast a vote of confidence. During the offline inquiry stage, China Fortune Outlet REIT was hotly subscribed, with a total of 51 allotment targets managed by 33 offline investors receiving inquiry quotation information, with a total of 882.1 million units to be subscribed, which is 6.3 times the initial offline offering shares.

Relevant people said that outlet consumer REITs are a sub-category of consumer REITs. They not only have the general characteristics of consumer REITs, but also the high cost-effectiveness of their underlying assets of "famous brands + discounts" shows obvious advantages in crossing economic cycles.

According to the statistics of Winshang.com, the retail format accounts for 30-50% of the business format combination of ordinary shopping centers, while the retail format of general outlet projects can reach about 80%. At the same time, the project volume of about 80,000-100,000 square meters can accommodate more than 200 stores, which can basically collect brands that are familiar to domestic consumers at one time. The brands are rich and the high-quality brands have obvious agglomeration effect, which can meet the one-stop shopping needs of consumers. Due to the extremely high proportion of retail formats, in a sense, outlets are regarded as a substitute for luxury shopping malls. These two types of shopping malls are also two sub-formats in shopping malls that are not high in proportion but have attracted much attention from the industry and capital market. They are generally believed to have strong stability and resistance.

This year, in the real estate industry, REITs products with holding assets as underlying assets have a clear trend of increasing. Real estate companies represented by China Resources, Vanke, and Capital Investment have issued REITs products with commercial projects as underlying assets. The rise of REITs is considered a profound change in the field of real estate finance. Although the domestic REITs market started late, it has developed rapidly in recent years under the impetus of favorable policies, broadening the financing channels for issuing companies and providing new options besides traditional financing methods such as bank loans and bond issuance, which helps to ease the capital pressure of enterprises.

On July 26, the National Development and Reform Commission issued the "Notice on Comprehensively Promoting the Regular Issuance of Real Estate Investment Trust (REITs) Projects in the Infrastructure Field", which further opened up the scale space for the regular issuance of REITs, which is conducive to promoting market-based pricing and achieving a balance of interests between investors and financiers.

Commercial real estate REITs are currently receiving more attention from the market because they have stable cash flow support from project rents. At the same time, the popularity of REITs products is also conducive to changing the heavy asset model of commercial real estate development into a "light" one.

Shouchuang Urban Development once stated that Shouchuang regards public REITs as the most important capital route option for its commercial assets. With the good opportunity of issuing REITs, Shouchuang's commercial sector will open up the whole chain of "investment, financing, operation and exit", which will not only improve the company's asset structure and cash flow, but also help to achieve the company's strategic transformation of light asset output; it will not only help the exit of Shouchuang Juda's outlets, but also provide further support for future project mergers and acquisitions, fund expansion, etc.

It is reported that Shouchuang Juda, a subsidiary of Shouchuang Urban Development, will serve as the coordinating operation and management organization of China Fortune Outlets REIT, and Beijing Shouju Commercial Management Co., Ltd., a subsidiary of Shouchuang Juda, will serve as the implementation operation and management organization.

Shouchuang Juda is a flagship commercial investment management platform under Shouchuang Urban Development Group with outlets as its core business. Its 2023 annual financial report shows that in 2023, Shouchuang Juda achieved revenue of approximately RMB 2.124 billion, a year-on-year increase of 127%. Among them, the revenue from property development business was approximately RMB 998 million, and the revenue from investment property development and operation business was approximately RMB 931 million. It turned losses into profits that year and achieved a net profit of approximately RMB 13.761 million.