PE short-term "nuggets" guarantee housing construction bank Jingrui public rental fund will be established within the year (VC299)

"If you have an affordable housing project, I can now let the bank send you (bank)." On March 23, a private equity investment fund partner registered in Tianjin revealed that in the face of 10 million units, The 1.4 trillion yuan investment in affordable housing is not only for commercial banks and insurance companies, but also trust companies and PEs.

In fact, the country's first investment fund for construction of affordable housing based on private capital investment has surfaced. On March 22, Li Xiaodong, chairman of CCB Jingrui Capital Management Group, publicly stated that its CCB Jingrui public rental housing construction investment fund will be formed within the year. The fund is planned to be set for 7 years, and the first phase of the plan will raise 10 billion yuan RMB, and is expected to reach 50 billion in three years.

Li said that the expected return on investment of CCB Jingrui Public Rental Construction Investment Fund is 5% to 12%. This figure appears slightly higher in the aforementioned Tianjin private equity investment fund partners. He said that in order to realize the return on investment, "banks, PEs, and trusts pay more attention to affordable housing, two-restricted housing (that is, limited housing prices, and limited sets of ordinary commercial housing) and shantytown renovation projects in relatively affordable housing projects." .

"The annual rate of return for investment in affordable housing projects should be mostly 10%, generally not higher than 15%. Because the cost of affordable housing land is low, construction and settlement costs are fixed, and the consumer group is huge, the benefits are predictable." A person from the business department of a state-owned big bank said that in the context of tight credit lines, although most commercial banks have not expressed their enthusiasm for affordable housing projects, the banks are also involved in this field through various cooperation models with trusts and PEs.

Make quick money: real claims, fake equity

CCB Jingrui launched the public rental housing construction investment fund. As the first fund specifically for housing investment, the promoters include CCB Jingrui, but also include Forte Group, Huayuan Real Estate, Sichuan New Hope and other real estate groups. In the first round of 10 billion fundraising, the above promoters subscribed a total of more than 20%.

Previously, public rental housing was generally regarded as unprofitable projects by commercial banks. And Li Xiaodong said that 5% to 12% or higher return on investment depends on the acquisition cost of the project and the choice of exit method. Its proposed exit methods include liquidation exit and capital market exit. The former includes government repurchase and market sale, while the latter is listed as REITs (real estate trust funds) or directly.

However, for small and medium-sized private equity funds that are on the brink of regulation, they are not expected to cash out through capital market exits.

The above-mentioned PE partners said that the existing mode of small and medium-sized PE involvement in real estate development is more than 80% similar to the trust model. "Trust was the earliest debt, and now it is slowly turning to equity, but it is not a pre-IPO equity investment. , Mainly to sign equity repurchase with major shareholders to achieve investment ".

He introduced that whether it is a fund or a trust company, the investment real estate project cycle is relatively short, generally not more than three years, "In the first two years, many people rushed to buy trust product yields of more than 7%, but now less than 9% to 10% cannot attract customers; and for real estate companies, the development period of more than two years needs to bear a lot of costs, and the company also hopes to repay the principal and interest in 2-3 years. "

In short, the current real estate development projects that PE companies are widely involved in are "true claims, false equity". According to the above-mentioned sources, the withdrawal mechanism generally adopts the repurchase of major shareholders. Even if the repurchase is difficult to achieve, the transfer of equity in the market is much more convenient than the fixed asset mortgage that trust companies have previously popularized.

At the same time, the above sources revealed that PE's fund raising channel still depends on the strong support of the bank's private banking department. "PE has a high probability of finding a bank to secure a housing project through a bank."

Silver letter resurrection

As early as February 26, the National Council of Social Security Funds provided a 3 billion yuan trust loan for the construction of Nanjing's affordable housing, and the pattern of trust companies' involvement in affordable housing has become increasingly clear.

A senior executive of Zhongxin Trust said that two-thirds of the profits of the trust industry now come from the contribution of real estate trust products. Real estate trust is an important financing channel for affordable housing projects, and trust companies are unwilling to give up this good opportunity.

With the tightening of real estate financing channels, real estate trust product interest rates were as high as 15% to 20%. Taking the "Wanxingdu Commercial Real Estate Project Loan Collected Funds Trust Plan" issued by Xinhua Trust in early March as an example, its expected return rate reached 11.5% and the term was 24 months.

At present, with the tightening of supervision on bank-trust cooperation, the trust's initiative in bank-trust cooperation has increased. The above PE person said, "Most trust companies now find their own projects, and even funds are not necessarily raised through bank channels. Many companies issue through third-party financial institutions, and the cost is even lower."

The above-mentioned big bank company department said that although the regulatory agency has strict regulations on the cooperation between banks and letters, but under the current background of tight credit lines, banks do not resist the above-mentioned second channel of cooperation. Compared to residential and commercial real estate, affordable housing projects are relatively easy to obtain bank approval.

The above-mentioned big bankers said that the mode of protecting housing, banking and trust, product design institutions and residential and commercial real estate models are the same, but the rate of return is slightly lower, 15% to 16% is very common, but ultimately reflects the benefits of customers There will not be much change.

At the same time, in order to ensure that more funds are attracted, many real estate projects bundle affordable housing with ordinary residential and commercial real estate development for sale. Among them, the proportion of affordable housing projects is between 40% and 60%. "Probably the low-income housing benefits, but the supporting commercial real estate development, its income is sufficient to ensure a pretty good rate of return." The above-mentioned trustee said.

The above information source "Venture Investment" is authorized by the China Venture Capital Research Institute (CVCRI) to publish it. All rights reserved. Please indicate the source when reprinting. For more information, please click download to view all articles.
Contact number 400-609-6665 800-999-3099
E-mail: