PROPERTY developer Country Garden has obtained regulatory approval to launch 10 billion yuan (US$1.6 billion) worth of quasi-Real Estate Investment Trusts (REITs), China’s largest so far, as the government pushes for the growth of the rental housing market.

The regulator approved the issuance of the asset-backed securities Friday, according to a Shenzhen Stock Exchange statement. Country Garden is China’s largest property developer by sales.

The securitization size is the largest so far in the rental housing industry and the quasi-REITs market. Developers and rental housing operators have been rushing into the securitization and debt market since the second half of last year to raise funds for the policy-supported but low-return sector.

China announced plans in August to launch pilot programs in 13 major cities, including Beijing and Shanghai, to build rental housing projects in an effort to ease a housing shortage.

State-owned Poly Real Estate and Shanghai-based CIFI have gained approval to issue 5 billion yuan and 3 billion quasi-REITs respectively for their rental housing projects late last year.

Country Garden has said it aims to launch one million units of rental apartment in the coming three years. Chief financial officer Wu Bijun said Friday that the profitability of the rental housing business in the short term will be low, so it is expected that the government will roll out supportive measures for market participants.

(SD-Agencies)