Deloitte assists offerings and listings of Zhangjiang and Shekou Industrial Zone REITs

Deloitte China today assisted the trading debuts of HuaAn Zhangjiang Everbright Park Close-Ended Infrastructure Real Estate Investment Trust (REIT) ("Zhangjiang REIT", trust code: 508000.SH) on Shanghai Stock Exchange and Bosera China Merchants Shekou Industrial Zone Close-Ended Infrastructure REIT ("Shekou Industrial Zone REIT", trust code: 18101.SZ) on Shenzhen Stock Exchange. These two REITs are among the first batch of publicly offered and listed public infrastructure REITs on the Chinese Mainland, and the first two REIT listings of this kind Deloitte China has completed.

Zhangjiang REIT offered 500 million units and the net proceeds raised from its public offering reached RMB1.495 billion. Shekou Industrial Zone REIT offered 900 million units raising net proceeds of RMB2.079 billion.

Including Zhangjiang REIT and Shekou Industrial Zone REIT, nine public infrastructure REITs were among the first batch of REITs to go public today, representing the pilot run of public infrastructure REITs on the Chinese Mainland. These listings are set to enhance the effectiveness of managing asset inventories, expand fundraising channels for equities and optimize resource allocation. They support innovation and demonstrate the value of the Chinese Mainland capital market. They will also enhance the quality and effectiveness of how the capital market serves the actual economy.

The successful offering and listing of the Zhejiang REIT and Shekou Industrial Zone REIT marked two notable 'firsts' for the Mainland capital market:

• Among the first batch of publicly offered and traded public infrastructure REITs, helping to establish such REITs in the Chinese Mainland;
• The first public infrastructure REIT in Shanghai and among the first batch of public infrastructure REITs in Shenzhen helping lead financial product innovation in the Yangtze Delta Region and Greater Bay Area. 

About the clients

Zhangjiang REIT was raised by HuaAn Fund Management in accordance with the requirements of related laws and trust contracts. It was approved by the China Securities Regulatory Commission (CSRC) to register and offer through Permit [2021] No.1670 on 17 May 2021. Zhangjiang REIT owns 500 lots on Sheng Xia Road in the China (Shanghai) Pilot Free Trade Zone. The land is situated at the core area of Zhangjiang Science City.

Shekou Industrial Zone REIT was raised by Bosera Asset Management in accordance with the requirements of related laws and trust contracts. It was approved by the CSRC to register and offer through Permit [2021] No.1664 on 17 May 2021. Bosera Asset Management is also the fund manager and China Merchants Bank is the fund trustee. The Shekou Industrial Zone REIT comprises Wanrong Building and Wanhai Building in Shekou Net Valley.

During the fundraising and listing process of the Zhangjiang and Shekou Industrial Zone REITs, Deloitte China provided professional services including audits of the historical financial statements of their infrastructure projects, reviews of the calculation tables of their trusts' allotted funds, and verification of the trusts.

The Zhangjiang REIT service team of was led by Alan Ni, managing partner of Real Estate Industry and Audit & Assurance; and Steffie Li, Audit & Assurance manager, with outstanding support from Caroline Yang and Shi Qing Liu, who are both technical partners; Simon Tan, managing partner of Real Estate Industry and Tax & Legal; Zachary Chen, Tax & Legal partner; and Kristy Chen, Tax & Legal senior manager.

The Shekou Industrial Zone REIT project team was led by Robin Wu, managing partner of Audit & Assurance; Yolanda Xie, senior manager of Audit & Assurance; and Journey Liu, Audit & Assurance manager, with tremendous support from Shanao Yu, technical partner; Samuel Xie, senior technical manager; Lisa Li, Tax & Legal senior manager; and Angela Xiao, Tax & Legal manager.

As a core service institution for the Zhangjiang and Shekou Industrial Zone REITs, Deloitte China participated throughout their fundraising and listing processes. During these projects, several engagement and technical partners from Deloitte China joined discussions on matters related to guidance on publicly offered infrastructure REITs, the tabulation of calculation tables for allotted funds, and major accounting issues, liaising with regulatory bodies including the CSRC, Ministry of Finance, Shanghai Stock Exchange and Shenzhen Stock Exchange. They contributed Deloitte China's wisdom to resolving issues related to the offering and issuance of the first batch of publicly offered infrastructure REITs in the Chinese Mainland.

With publicly offered infrastructure REITs a brand new financial product in the Chinese Mainland, there was little previous guidance or case studies to guide their fundraising and listings. To overcome this, Deloitte China's service engagement teams worked collaboratively, leveraging their vast professional expertise and industry experience, and working prudently and diligently to deliver world-class services. They also worked with other intermediaries to resolve various difficulties encountered in the listing process of the two REITs. The effectiveness and quality of their work during the listings of the Zhangjiang and Shekou Industrial Zone REITs was highly recognized by Zhangjiang Group, China Merchants Shekou Industrial Zone, and related intermediaries.

Deloitte China is dedicated to providing clients with professional, high-quality services, helping more fund managers and original stakeholders to issue publicly offered infrastructure REITs to forge ahead in a challenging macro-economic and capital market environment. This underscores Deloitte China's leadership in sectors related to offering services for publicly offered infrastructure REITs. We also look forward to leveraging our experience and perspective in China and international markets to help more companies diversify their strategic layouts, expand their capital scale, and accumulate advantageous resources.

Stay tuned for more exciting listing news from our clients soon!