CEL plans to access overseas REITs

03 July 2014   Category: News, Asia, China, Global, Singapore   By Hui Ching-hoo

Mainland financial conglomerate China Everbright Ltd (CEL) says that it is looking to dip its toes into the overseas REIT market.

The announcement comes after the firm’s wholly-owned subsidiary, Everbright Hero Holdings, agreed to invest around S$284 million (US$227.9 million) in Singapore-listed, China-based developer Ying Li International Real Estate.

Ying Li is one of the largest developers in the second-tier Chinese city of Chongqing. The firm owns a number of prime plots located in commercial projects such as Zou Rong Plaza, with a total gross floor area of more than 700,000 square metres.

CEL said that the subscription of new shares and perpetual securities would make the company the second largest shareholder in Ying Li.

Chen Shuang, executive director and chief executive officer of CEL, said the firm is looking to list Ying Li’s property projects on the Singapore Stock Exchange in the form of REITs, according to a report from 21st Century Business Herald.  

“We like Ying Li’s strategy of focussing on high-quality commercial and retail property development and urban renewal in the Chongqing central business district, which provides CEL’s real estate fund an efficient access into Chongqing’s prime property projects. Moreover, the transaction provides CEL opportunities to further develop real-estate asset management products in future,” Mr. Chen said. “We believe this strategic cooperation can provide complementary advantages and bring about mutual benefits to each other.”

Up to the end of December, CEL had 18 residential and commercial properties in the first and second-tier cities in China.