Financing 4 billion! Suning brewing big plan?

[PConline News] Suning Yunshang once again raised a large amount of financing. This time it took a completely different approach from the previous issuance of shares or the issuance of bonds: the sale of self-owned properties as a whole to real estate investment funds.

On October 14, Suning Yun announced that it plans to transfer its 11 store assets to CITIC Jinshi Fund Management Co., Ltd., with a price not lower than RMB 4 billion. These stores in Beijing, Chengdu, and Chongqing are mostly Suning quality assets.

Suning said that the transfer of the ownership of the house and the corresponding land use rights, Suning's interest in these properties will change from holding to leasing, the store business as usual.

This type of capital operation, which is known as a "surge" by Suning insiders, is called "REITs", real estate investment funds. Two weeks ago, the People's Bank of China and the China Banking Regulatory Commission issued the "Notice on further improving the work of housing finance services," and called for "actively and steadily launching pilot real estate investment funds (REITs)." The notice stated that the REITs system is not only prevalent in Europe and the United States, but has also been implemented in countries such as Japan and Singapore in Asia. Judging from the development experience of these countries, turning REITs in large-scale properties into standardized products and selling them to the public through capital markets is the best way for commercial real estate to be recognized. This is also considered to be an important financial innovation since the last century. one.

Suning sells its own property to private equity funds, and then signs a lease agreement with the fund. The fund can obtain long-term and stable rental returns, and at the same time, it can obtain a premium arising from the appreciation of the property. Suning can get a large amount of funds at one time and then reinvest it into what it believes. In areas where greater benefits can be achieved, this is actually a win-win situation.

Suning, through cooperation with CITIC, can innovate its asset operating model and revitalize its existing assets. Suning hopes to establish a benign asset management method from purchase to operation and continue to consolidate offline stores to better integrate online and offline.

(Image source network)

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