Milder interests, more attractive valuations
- The first batch of retail C-REITs, totaling c.Rmb9bn, is expected to be listed in late Feb
- Investor appetite has cooled vs previous rounds as evidenced by 1) higher participation from sponsors and strategic investors; and 2) assets priced at a discount to their valuations
- Nevertheless, the exit yield at c.4.5-5.0% should still render the initiative attractive to asset owners and more spin-offs may be on the way
- Recent unit price correction on land-use rights C-REITs offer an attractive entry point for investors – we favour GLP C-REIT (508056 CH)