China Index Research Institute: Total real estate corporate bond financing in September 2024 was 42.83 billion yuan, up 8.0% year-on-year

The Zhitong Finance App learned that according to monitoring by the China Index Research Institute, the total amount of real estate corporate bond financing in September 2024 was 42.83 billion yuan, up 8.0% year on year. Under the influence of last year's low base, it was corrected year on year, down 22% month on month. The average interest rate for industry bond financing was 3.06%, down 0.62 percentage points year on year and up 0.53 percentage points month on month.

Financing structure: Credit bond issuance declined slightly month-on-month, and ABS issuance increased significantly

Looking at the financing structure, in September, credit bond financing in the real estate industry was 16.99 billion yuan, down 5.1% year on year, down 52.1% month on month, accounting for 39.7%; ABS financing was 25.84 billion yuan, up 24.0% year on year, up 33.1% month on month, accounting for 60.3%.

From January to September 2024, the total amount of bond financing in the real estate industry was 413.02 billion yuan, a year-on-year decrease of 27.0%. The decline was narrower than the previous month. Among them, credit bond financing was 25.11 billion yuan, down 26.8% year on year, accounting for 62.0%; overseas bond issuance amount was 6.70 billion yuan, down 53.7% year on year, accounting for 1.6%; ABS financing was 15.22 billion yuan, down 25.5% year on year, accounting for 36.4%.

The total number of credit bonds issued in September declined compared to the previous month. Due to the high base of last month, the scale and scope of bonds issued by private housing enterprises decreased. Binjiang and Midea Real Estate issued 3 credit bonds during the month, totaling 1.9 billion yuan. However, the share of total credit bonds issued increased, up 2.9 percentage points from the previous year. Central state-owned enterprises such as Poly Development and Huafa Co., Ltd. continued to actively issue credit bonds during the month, amounting to 2 billion yuan and 890 million yuan respectively. The scale of corporate bonds issued this month increased compared to the previous month, accounting for 56.5% of the total number of credit bonds issued, and the share of bonds over 3 years reached 58.8%, leading to an increase in the average issuance period of credit bonds during the month.

The distribution amount of ABS increased month-on-month, and the distribution scale reached 25.84 billion yuan, a sharp increase for two consecutive months. Among them, REITs are the most widely issued asset securitization products, accounting for 45.8%; followed by supply chain ABS, accounting for 30.7%; CMBS/CMBN accounting for 20.1%; and a small amount of guaranteed housing ABS.

Overall, this month's ABS product types are still dominated by those supported by high-quality underlying assets, and the ABS channel has always been open to companies with high-quality holdings. Within the month, guaranteed housing REITs were upgraded, and China Merchants Fund's China Merchants Shekou Rental Housing REIT was issued, with an issuance scale of 1,364 billion yuan. The underlying assets were Taiziwan Talent Apartment Phase I and the underforest project of China Merchants Peach Garden Phase V, located in Nanshan District, Shenzhen. Both projects are part of the “One Stack” series of talent rental housing under China Merchants Shekou. The construction area is about 65,300 square meters, with a total of 927 rental housing units and 15 supporting commercial units. According to estimates, if the total amount of capital raised is calculated based on the sale price of 2,727 yuan/share and the sales share of 500 million copies, the corresponding predicted net cash flow distribution rate for the period from July 1 to December 31, 2024 will be 4.00% (annualized), and the corresponding predicted net cash flow distribution rate for 2025 is 4.05%.

This month, consumer infrastructure REITs, warehousing and logistics REITs, and industrial park infrastructure REITs were all expanded. For example, Huaxia Joy City commercial REIT issuance scale was 3.323 billion yuan, Huatai Baowan Logistics REIT was established at a scale of 1,219 billion yuan, and Yifangda Guangkai Industrial Park REIT and Boshijin Kaiyuan REIT issuance scale were 2,058 billion yuan and 1,199 billion yuan respectively. After more than three years of development, the public REITs market is undergoing normalized distribution, and the trend is steady and upward.

Financing interest rate: Interest rate on bond financing declined year-on-year

In terms of financing interest rates, the average interest rate for bond financing this month was 3.06%, down 0.62 percentage points from the previous year and 0.53 percentage points higher than the previous month. Zero issuance of overseas bonds and year-on-year decline in interest on credit bonds and ABS this month led to a decline in the comprehensive average interest rate for financing. Among them, the average interest rate on credit bonds was 2.80%, down 1.1 percentage points year on year, up 0.26 percentage points from month to month; the average interest rate for ABS was 2.53%, down 0.13 percentage points year on year and up 0.70 percentage points month on month.

Corporate financing trends: Poly Development has the highest issuance amount, and Su Gaoxin has the lowest cost

Judging from the issuance of typical housing enterprise bonds, Poly Development had the highest financing amount this month, at 2 billion yuan. Su Gaoxin's average financing interest rate was 2.06%, and the financing cost was the lowest.