Special topic: gather 2024 funds Quarterly report

Two months after the establishment of the fund contract and one month after listingFreecryptomobilegamesChina's first batch of three consumer infrastructure public offering REITs handed over their short-term transcripts for the first time.

With the disclosure of the first quarterly report of public offering funds, the first-quarter performance of Jia Wumei Consumer REIT, Huaxia Jinmao Commercial REIT and Huaxia China Resources Commercial REIT was also announced. On the whole, the distributable amount of the three projects during the quarterly reporting period basically met the time-weighted forecast for 2024, and the underlying asset rental rate exceeded 98%, which was steadily higher than that of the initial evaluation benchmark. In terms of attracting passenger flow, ensuring rent and increasing income, upgrading the brand level has become the core direction of the operation of the underlying assets of many consumer REITs.

However, different from the hot discussion before the listing, since the release of consumer REITs, the performance of the secondary market and the attitude of investors have always been relatively more "calm". Some interviewees told the 21st Century Economic report that they still hope to continue to track and verify the operation quality of the underlying assets of consumer infrastructure and the use of funds raised.

The distribution of income basically realizes the expectation.

From policy boost, product declaration to formal entry into the secondary market, since 2023, the opening of consumer infrastructure REITs is undoubtedly one of the hotspots in the industry. Recent data show that China has set up a total of 36 public REITs, including consumer REITs4 only.

At present, in addition to CICC print Power Consumer REITs just finished raising at the beginning of this month, the other 3 have taken the lead in landing in the capital market for more than one month. As of April 22, Jiayumei Consumer REIT, Huaxia Jinmao Commercial REIT and China Resources Commercial REIT have all completed the disclosure of their first quarterly results since listing.

How did the first batch of consumer REITs "transcripts" perform? Specifically, the fund contract of Wumart Consumer REIT and Huaxia Jinmao REIT was established on January 31st, while Huaxia China Resources Commercial REIT was established on Feb. 7, and took the establishment date of each of the three funds to March 31st as its statistical range for the first quarter reporting period. Since its establishment two months ago, the highest rate of distribution available in the range is Wumart consumption REIT.

According to the quarterly report, Wumart has a revenue of 1887 since the establishment of REIT.Freecryptomobilegames.580 million yuan, with a net profit of 6.6393 million yuan and an available allocation amount of 12.1132 million yuan, compared with the previous forecast of 67 million yuan in the recruitment prospectus for the allotable amount in 2024. If it is simply weighted according to the proportion of the establishment time of the project to the whole year, the completion rate of the distributable amount during the reporting period is 18%, which exceeds the expectation of the annual forecast value of 1max 6.

Jinmao Commercial REIT Quarterly report also showed that the fund could be allocated 8.8727 million yuan in the current period, reaching 16.88 percent of the annual forecast value of 52.5429 million yuan in two months. During the reporting period, the fund achieved an income of 14.6213 million yuan and a net profit of 2.8187 million yuan.

China Resources Commercial REIT, as the largest consumer REITs on the market, has an available distribution amount of 51.2289 million yuan on the 54 days after its establishment, which is about 15% of the forecast of 341 million yuan for the whole year. The corresponding annualized distribution rate reached 5.03% in the first quarter, slightly higher than the 4.93% forecast for the whole year.

Among them, the revenue of the project during the reporting period is 100 million yuan, and the net profit is-4.2658 million yuan, which is also the only project with negative net profit in the first quarterly report of three consumer REITs, but the reporter noted that this loss is not caused by operating reasons. In the prospectus, the manager's forecast for the annual net profit of China Resources Commercial REIT2024 is-41.8336 million yuan, of which the annual core expenditure is used to buy shares in the project company. In the forecast for 2025, this figure will return to 13.3228 million yuan.

After experiencing the sharp decline in rental rate and secondary price, the perspective of the market to measure the REITs qualification of property rights is gradually changing, and a stable rental rate has increasingly become the lifeline of the underlying assets. The first quarterly report shows that the occupancy rates of the three consumer REITs projects remain high, and the occupancy rates of the 2x3 projects are higher than the benchmark time point of the initial evaluation.

It is understood that the underlying infrastructure projects of Jiayumei REIT are community businesses with supermarkets as the main stores, including Dacheng Project, Jade fly Bridge Project, Huatian Project and Deshengmen Project located in Beijing. As of the end of March 2024, the overall rental rate of the above infrastructure assets was 98.33%, while according to the fund prospectus, the total rental rate of the four projects was only 88.71% at the end of June 2023.

Take another look at the two funds owned by Huaxia Fund, Qingdao Vientiane City, which is the underlying asset of China Resources Commercial REIT, whose occupancy rate was 99.16% at the end of the first quarter, up from 98.49% in the middle of last year. The latest occupancy rate of Changsha tourist city, the underlying asset of Jinmao REIT, remained at 98.26 per cent at the end of the first quarter, down 0.1 per cent from the end of June 2023.

It is worth mentioning that in the all-public REITs market, the overall occupancy rate of the three consumer REITs in the first quarter is very high. In fact, different from the common property rights assets in the public market, such as industrial parks, the scattered tenants of the underlying assets of consumer REITs make it less risky than the centralized surrender of property rights assets. In the quarterly report, a number of projects have described tenants as "structurally stable" and "highly decentralized".

Pay attention to the ability of long-term operation and the realization of income

As an important closed-loop channel for the commercial real estate industry, from the first batch of products declared to rapid approval in October last year, consumer REITs has once become a hot topic in the REITs market. In the view of many analysts, the introduction of REITs means that commercial real estate is given a new position different from the general real estate field, which is expected to accelerate the revitalization of existing assets and inject new vitality into the physical commercial consumption scene.

From listing to the end of the first quarter, all three consumer REITs reported negative returns, down 5.3 per cent on average, according to Wind. The market performance of several products has rebounded since the second quarter, with Wumart Consumer REIT and China Resources Commercial REIT growing slightly by 0.8 per cent and 0.3 per cent respectively since its inception. Jinmao commercial REIT fell 5.6%, ranking at the bottom of the market.

A risk investor who participated in the public offering of REITs investment told the 21st Century Economic report that the income of consumer public offering REITs comes from the rental income of the underlying assets on the one hand and the appreciation of assets on the other. At present, its company is still cautious about investing in consumer infrastructure.

"at present, the state's regulation and control policy on commercial real estate is still relatively strict, but department stores and shopping malls are essentially real estate that rely on leasing as the main source of income." The person pointed out. "the average rents of shopping malls in 2023 are significantly higher than those before the epidemic, but at present we continue to pay attention to the realization of long-term and stable benefits."

Different from the old model in which housing enterprises earn investment income with high leverage, as rental income is closely related to the dividend rate of public offering REITs, the pursuit of high-quality operation and management capabilities to enhance asset attractiveness is becoming a new business situation. In this year's quarterly report, two REITs with shopping malls as their underlying assets also revealed ideas to increase their income.

The reporter noticed that the two shopping malls are committed to upgrading the brand level of the mall, introducing and retaining high-end trends, and quality and conceptualized stores have become the direction of attracting investment reserves.

In terms of management promotion, Changsha Tour Show City project makes rational use of the field space, enriches the consumption scene and broadens the source of income through multi-economy business and joint venture consignment business. Jin Mao Consumer REIT Quarterly report said that the project "through the transformation of joint venture business to diversified business, significantly increased the proportion of the size of diversified business, taken together, the net income of joint venture business and diversified business is higher than the forecast level at the time of issuance".

China Resources Commercial REIT pointed out that Qingdao Vientiane City is undergoing active optimization adjustment and renovation of local formats, which is planned to be completed by the end of October 2024, when it is expected to add about 6168 square meters of leasable area and plan about 40 shops to further enhance the asset value and income level of the project.

In February this year, the Ministry of Commerce designated 2024 as the "consumption promotion year" around promoting the sustained expansion of consumption, and proposed to adhere to the two-wheel drive of "policies + activities" in the first quarter, highlighting key categories, festival seasons, and so on. continue to organize and carry out rich and colorful activities to promote consumption to create a good consumption atmosphere. According to industry insiders, in the medium-term dimension, consumer infrastructure REITs is expected to benefit from the continued release of national consumer demand, as well as the expansion of the new scene of business, travel, stylistic integration and consumption.

In addition, the aforementioned risk investors also pointed out that at present, most of the eligible assets in China that meet the conditions for the entry of consumer REIT bottom assets into the pool are commercial facilities in first-tier and new first-tier cities, but the construction of commercial facilities in such cities has also basically become saturated, which means that the choice of subsequent asset capacity increase is relatively limited.

However, in this regard, the recent "study and formulation of regulations on the management of real estate investment trusts" mentioned in the new "National Nine articles" is also expected.

"if the follow-up new regulations stipulate the diversification of the reinvestment of the funds raised by the public REITs, it may supplement the development of consumer infrastructure and provide a better reference for investors." The person said.