CHINA’S first public real estate investment trust (REIT) received investor orders for about 1.6 times the amount of units being sold in its initial public offering.

    The closed-end REIT managed by Shenzhen-based Penghua Fund Management Co. received 4.9 billion yuan (US$789 million) in subscriptions, after offering 3 billion yuan in units to investors, according to Yu Linbo, the fund’s public relations manager.

    The trust, made up of office buildings from China Vanke Co. in Shenzhen, is awaiting completion of industry and commerce registration before it starts to trade on the Shenzhen Stock Exchange, Yu said Friday.

    The China Securities Regulatory Commission in June granted approval for the first public sale of units by a REIT, allowing builders to look for alternative ways to make money from their investments in commercial property.

    “The over-subscription is in line with our expectation,” Yu said. “The product drew quite a bit of public attention.”

    The listing schedule hasn’t been derailed by the stock market rout, which has wiped out about US$2.5 trillion of market value since June 12, she added.

    The REIT, backed by the operating rights of the property assets, differs from the traditional REIT structure in the United States, where investors have full ownership of the assets in the trust, according to a June 17 Barclays Plc. report.

    The underlying assets are owned by Shenzhen Qianhai Development & Investment Holding Co., a State-owned developer fully owned by the Shenzhen city government, according to the trust’s June 23 prospectus.

    It’s the only “quasi-REIT” product in China designed to be accessible to all retail investors once it lists on the Shenzhen exchange, Barclays said in the report.

    “At least it shows that the government is becoming more and more open with REITs,” said Du Jinsong, a Hong Kong-based analyst at Credit Suisse Group AG. (SD-Agencies)