Aerial photo taken on June 30, 2021 shows vehicles running on the Beijing-Urumqi Expressway in northwest China's Xinjiang Uygur Autonomous Region. (Xinhua/Hu Huhu)
BEIJING, Nov. 15 (Xinhua) -- The second batch of publicly-offered infrastructure real estate investment trusts (REITs) have been approved by Chinese regulators on November 12, reported Securities Times on November 13.
The newly-nodded two infrastructure REITs have an expressway and three properties in an industrial park as underlying assets respectively and are about to kick off subscriptions, according to the report.
Prior to them, the first batch of nine publicly-offered infrastructure REITs have been listed on Shanghai Stock Exchange or Shenzhen Stock Exchange for more than four months since June 21.
After weathering pullbacks at the beginning weeks, prices of the nine infrastructure REITs have mostly bottomed out by far.
However, their price rises differed notably, with Shougang Biomass REIT (180801.SZ) up 31.58 percent and Guangzhou-Heyuan Expressway REIT (180201.SZ) down 0.31 percent since their debut by November 12.
Industry insiders held that expressways belong to franchise assets and boast significantly higher internal rate of return (IRR) compared with property rights. Usually barely affected by macro-economic and industrial policies, expressways are broadly deemed quality underlying assets for publicly-offered infrastructure REITs.
But some market watchers reminded that investment risks of REITs are less than those of stocks but higher than those of bonds and part of the first batch of nine publicly-offered infrastructure REITs were obviously transacted at prices with premiums.
Under such circumstances, investors shall be prudent and do not blindly bet on further rises. (Edited by Duan Jing with Xinhua Silk Road, firstname.lastname@example.org)