The state-owned lender, which will provide money for the fund, plans to invest in real estate projects and turn them into affordable rental houses, CCB said
Jason Xue and Brenda Goh, Reuters News
September 24, 2022
REAL ESTATECHINA (PRC)ASIAFINANCIAL SERVICES
SHANGHAI – China Construction Bank (CCB) said it plans to set up a 30-billion-yuan ($4-billion) fund to finance rental housing, China’s latest state-backed effort to aid the struggling property sector.
The state-owned lender, which will provide money for the fund, plans to invest in real estate projects and turn them into affordable rental houses, CCB said in a statement late on Friday.
Beijing has been stepping up efforts to aid a real estate sector hit by debt buildup, mortgage boycotts and sluggish sales. Property and related sectors such as construction account for more than a quarter of China’s economy.
The authorities have allowed affordable rental houses to be listed in the form of real estate investment trusts (REITs), opening a fresh financing channel for the business.
Reuters reported in July that China planned to launch a real estate fund to help property developers resolve a crippling debt crisis. The fund would initially be set at 80 billion yuan through support from China’s central bank, with CCB contributing 50 billion yuan, a source said.
China’s policy banks and local governments have also been setting up funds to help cash-strapped developers finish construction of pre-sold properties, as protests by home buyers spread.
(Reporting by Jason Xue and Brenda Goh; Editing by William Mallard)