Standardize and efficiently implement real estate investment trust (REITs) projects in the field of infrastructure

First, do a good job in the early stage of the project

(1) Fully understand the importance of early cultivation work. The early-stage cultivation of infrastructure REITs projects includes sorting out and screening assets, formulating product solutions, improving compliance procedures, solving difficult problems, etc. It is of great significance to strengthen project reserve, guarantee project compliance, improve asset quality, promote sound operation and improve recommendation efficiency. Local development and reform commissions should attach great importance to the early cultivation of infrastructure REITs projects, help and guide sponsors (original rights holders), fund managers, etc., to jointly do a good job in project cultivation, promote the project to meet the declaration conditions as soon as possible, and timely reflect the common problems and solutions to the Commission.

(2) Ensure that the application materials are true and objective. The initiator (the original owner) shall, in accordance with the Notice of the National Development and Reform Commission on Further Doing a good job in the pilot work of Real Estate Investment Trust (REITs) in the field of Infrastructure (Development and Reform Investment (2021) No. 958) and the General Office of the National Development and Reform Commission on doing a good job in the field of infrastructure Real Estate Investment Trust (REITs) newly purchased projects Recommendation of the relevant work Notice (Development and Reform Office Investment [2022] No. 617), this notice and the requirements of the project declaration format text, carefully prepare the project declaration materials, true, comprehensive and objective reflection of the project situation, shall not use fraud, avoid serious light, illegal packaging. Provide the historical income data of the project truthfully, comprehensively analyze the factors that may affect the income of the project, and objectively predict the future income level of the project. If the promoters (original rights holders), fund managers, etc., do not truly, comprehensively and objectively reflect the project situation, deliberately conceal or even cheat, the Commission will, depending on the seriousness of the circumstances, take reminders, suspension of acceptance and other ways to deal with, and ask the relevant departments to punish according to law.

3. Organizing and coordinating departments. The local development and reform commissions should strengthen communication and cooperation with the local offices of the China Securities Regulatory Commission, the Shanghai and Shenzhen Stock exchanges, as well as the departments of industry management, natural resources, ecological environment, housing and urban and rural construction in the region, jointly coordinate to solve the key and difficult problems encountered in the early stage of project cultivation, and shorten the project cultivation cycle as much as possible. In accordance with the requirements of document No. 19 issued by the State Office of the People's Republic of China (2022), under the premise of law and compliance, actively implement the project activation conditions, focusing on the improvement of investment management procedures, the handling of property rights certificates, land use compliance, and the confirmation of asset transfer conditions, etc., and coordinate relevant parties to support the project issuance of infrastructure REITs.

2. Reasonably grasp the project issuance conditions

4. Supporting the development of consumer infrastructure. Implement the decision and deployment of the Party Central Committee and The State Council on restoring and expanding consumption in a priority position, research and support consumer infrastructure that enhances consumption capacity, improves consumption conditions, and innovates consumption scenarios and issues infrastructure REITs. Give priority to supporting urban and rural commercial network projects such as department stores, shopping centers, and farmers' markets, and issue infrastructure REITs for community commercial projects that guarantee basic people's livelihood. The nature of the project land should conform to the relevant regulations of land management. The project sponsor (original owner) shall be an independent legal entity holding consumer infrastructure and carrying out related business, and shall not engage in commercial residential development business. Promoters (original rights holders) should use the recovered funds to increase investment in convenience business, smart business circle, and digital transformation to better meet the consumer needs of residents. It is strictly prohibited to circumvent the real estate regulation requirements, and it is not allowed to provide disguised financing for commercial residential development projects.

(5) Reasonable control of project income and scale. According to the specific conditions of different types of infrastructure REITs projects, the project income level should be reasonably grasped. Declare and issue the franchise rights and operating income rights of infrastructure REITs, and the internal rate of return (IRR) of the fund's duration shall not be less than 5% in principle; For non-franchise and operating income rights projects, it is expected that the annual net cash flow distribution rate in the next three years will not be less than 3.8% in principle. Through stripping inefficient assets, expanding income sources, reducing operating costs, improving management efficiency and other ways, we can strive to improve the level of project income and meet the requirements of project issuance. For the affordable rental housing projects of infrastructure REITs issued for the first time, the current target net value of real estate is not less than 800 million yuan in principle.