On October 26th, China Jinmao Holdings Group Co., Ltd. (00817) announced on the Hong Kong Stock Exchange that it plans to issue a public REITs project through its subsidiary, Changsha Lanshow City Shopping Center. On the same day, the official website of the Shanghai Stock Exchange showed that it has accepted the project &#34;Huaxia Jinmao Shopping Center Closed-end Infrastructure Securities Investment Fund&#34;. If this project is successfully approved for issuance, it will become one of the first domestically issued consumer infrastructure public REITs, further expanding the types of underlying assets for public REITs and adding new members to the public REITs market.
International consumer center city commercial landmarks: High-quality underlying assets are more favored by investors.
The underlying asset for this proposed public REITs project is Changsha Lanshow City. Changsha Lanshow City is the first Lanshow City product created by China Jinmao. It is located in the core business district of the Meixi Lake area, the first national-level new area in the central region. With a construction area of approximately 100,000 square meters, it has been in operation for nearly 7 years since its opening at the end of 2016 and is a mature and stable shopping center project.
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20231026/1698322554877315.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="b476fd517111b03f634d435504eb9c4.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20231026/1698322554877315.png"/>
(Changsha Lanshow City)
Changsha Lanshow City is located in Changsha, a central provincial capital city with a developed night economy and huge consumption potential. It is located in the core area of the national-level new area, Xiangjiang New Area. Data shows that in 2022, Xiangjiang New Area, with only 0.5% of the province's land, contributed 8% of the GDP, ranking sixth among national-level new areas in terms of GDP for the whole year. With the expansion of the city, population migration, consumption upgrading, and the development of rail transit, benchmark projects represented by Changsha Lanshow City have emerged strongly. The population within a 1-kilometer radius is approximately 47,500, within a 3-kilometer radius is approximately 587,800, and within a 5-kilometer radius is approximately 1,458,900. The overall consumer potential of the customer base is enormous. With the advantages of location, high-quality customer base, and solid consumer foundation, Changsha Lanshow City has maintained a high-speed development trend of nearly full occupancy for the past 7 years and has high growth potential.
Industry insiders of infrastructure REITs believe that the National Development and Reform Commission and the China Securities Regulatory Commission have respectively issued the &#34;Notice on Standardizing and Efficiently Carrying Out the Declaration and Recommendation Work of Real Estate Investment Trusts (REITs) Projects in the Infrastructure Field&#34; (Development and Reform Investment [2023] No. 236) and the &#34;Decision on Amending Article 50 of the &lt;Guidelines for Publicly Offered Infrastructure Securities Investment Funds (Trial)&gt;&#34;, expanding the types of public REITs pilot assets to consumer infrastructure. This is conducive to revitalizing trillions of consumer infrastructure and promoting the recovery and expansion of consumption.
From a consumer perspective, public REITs are a powerful way to enhance consumption capacity and improve consumption conditions. As more and more consumer infrastructure is included in the types of public REITs pilot assets, it will help introduce social capital to participate in offline consumption scene investments and increase residents' consumption by creating offline consumption spaces that consumers love.
Based on the above reasons, many fund managers believe that shopping center projects will be more favored by investors in the current market.
REITs platform gathers high-quality assets: huge potential for future growth
China Jinmao is a leading urban operator in China, focusing on four main businesses: real estate development, boutique holdings, quality services, and architectural technology. Its commercial sector creates a differentiated business model through consumer insights, borderless integration, digitization, and green technology innovation. Its core brand, &#34;Landmark City,&#34; focuses on experience and innovative formats, targeting middle-class families. China Jinmao's 2023 interim report showed a year-on-year revenue growth of 68% in the commercial sector, surpassing pre-pandemic levels and reaching a new high for the same period. By fully utilizing favorable financial policies and flexibly using capital market tools to revitalize high-quality commercial assets, China Jinmao has more room for future development.
As a strong player in the commercial holdings track, China Jinmao owns a large number of high-quality and high-growth commercial assets.
Currently, Jinmao's commercial sector has brands such as &#34;Landmark City,&#34; &#34;Jinmao Hui,&#34; and &#34;Jinmao J·LIFE,&#34; covering multiple core cities such as Shanghai, Nanjing, Changsha, Qingdao, and Tianjin. China Jinmao is accelerating the development of its retail commercial sector, with Landmark City in Qingdao, Zhangjiagang, and Jinmao Hui in Tianjin opening at the end of 2022, quickly leading the local consumption trend. Public information shows that in the first half of this year, Jinmao's commercial sector saw a growth of 68% in revenue, 125% in sales, and 110% in customer traffic. In addition, China Jinmao is preparing and constructing Landmark City projects in high-energy cities such as Wuhan, Hangzhou, and Tianjin.
In the future, numerous high-growth and high-quality commercial assets can be continuously injected into the public REITs platform, combined with China Jinmao's strong brand advantages, abundant business resources, and mature management team, to fully guarantee the growth space of Jinmao's commercial assets in the future.
Analysts pointed out that if China Jinmao's public REITs under its umbrella are successfully issued, it will help China Jinmao expand the investment scale of its boutique commercial sector and enhance its self-sustaining ability, bringing more room for imagination to its future development. The rich commercial assets of Jinmao not only have the potential to create good returns for investors but also can bring new offline consumption scenes and experiences to millions of citizens, supporting and empowering the consumer side. At the same time, the net funds raised from the issuance of consumer infrastructure public REITs can be reinvested in consumer infrastructure, which will help further expand domestic demand and boost consumption. With the progress of the first batch of consumer infrastructure public REITs projects, it also indicates that China's public REITs market is gradually showing a trend of normalized issuance.

00817

The company plans to issue a public offering REITs project through its subsidiary, Changsha Lanchi Show City Shopping Center.

China Jinmao Holdings Group plans to issue public REITs, which will bring more room for imagination with high-quality and high-potential assets.