Deloitte assists offering and listing of CRCC REIT

Deloitte China today assisted the trading debut of the Guojin Railway Construction Chongqing Yusui Expressway Closed-end Infrastructure Real Estate Investment Trust (“CRCC REIT"; trust code: 508008.SH) on Shanghai Stock Exchange. This is the 1st infrastructure REIT listing in Southwest China, and the 1st ever REIT of China Railway Construction Corporation (“CRCC”), a general construction group. It also marks Deloitte China's 1st REIT listing with management rights as an underlying asset.

In 2021, Deloitte supported the listings of the Zhangjiang and Shekou Industrial Zone REITs, which were among China’s first nine publicly offered infrastructure REITs. The completion of the CRCC REIT underscores our leadership in offering services for publicly offered infrastructure REITs.

The CRCC REIT offered 500 million units at RMB9.586/unit as its subscription price. The issuance of the CRCC REIT will diversify the underlying assets of publicly offered infrastructure REITs, help revitalize existing high quality infrastructure assets, expand effective investments, and support the sustainable development of infrastructure investment projects.

About the client

Gfund Management (“Gfund”) raised the REIT in accordance with related laws and trust contract requirements. Its registration and offering were approved by the China Securities Regulatory Commission (“CSRC”) through Letter of Approval (Zheng Jian Xu Ke [2022] No. 1165) on 6 June 2022. Gfund is the fund manager and China Merchants Bank is the custodian.

The underlying asset is the Chongqing section of the Chongqing-Suining Expressway BOT project (“Yusui Expressway”) which is owned by Chongqing Tiefa Suiyu Highway. As the main artery of Chongqing’s road network, Yusui Expressway is the second highway connecting the major cities of Chengdu and Chongqing. It has a pivotal role in advancing the Western Region Development Strategy and accelerating construction of Chengdu-Chongqing economic circle.

About our service team

During fundraising and listing, Deloitte China provided professional services including audits of the historical financial statements of the infrastructure project, and reviews of the calculation tables of the REIT’s allotted funds. We also offered value-added services, from accounting scheme advisory to responses to inquiries on accounting treatments.

Celine Ma and Eric Shi, Audit & Assurance partners, and Hannah Han, Audit & Assurance manager, led the CRCC REIT service team. Xiao Hong Cong, Northern Region PRC Technical leader of Capital Market Services Group and Doris Liu, Technical partner, and Emma Shen, Technical manager provided outstanding support and guidance.

As a core service institution of the CRCC REIT, Deloitte China participated throughout its fundraising and listing, accumulating substantial experience. The engagement team was deeply involved in extensive discussions on REITs organized with the National Development and Reform Commission, CSRC, Ministry of Finance, and Shanghai Stock Exchange, which provided instructive input and practical suggestions that won recognition from all stakeholders.

Our engagement team worked closely with the original owner of the infrastructure assets and other intermediaries to overcome many difficulties and complete the REIT's application and issuance. Deloitte professionals’ rigor, devotion, open mind, industry experience, professional expertise, prudence and diligence.

The successful listing of the CRCC REIT is also a milestone for Deloitte China’s construction sector team in providing professional services to China’s infrastructure construction enterprises in capital markets, and demonstrates the firm’s comprehensive capabilities in serving infrastructure projects, covering the whole process of investment, finance, construction, and management. Deloitte will continue to participate in initiatives of the General Office of the State Council to further revitalize existing assets and expand effective investments.

Deloitte China congratulates CRCC REIT on its listing on Shanghai Stock Exchange. We will continue to provide high quality professional services to assist more clients to take one step ahead in today's increasingly competitive and complex business environment.