Alibaba Approved for Infrastructure Asset Spin-Off via Shenzhen REIT Listing

Select Language:

Chinese tech giant is moving forward with plans to spin off one of its infrastructure assets through a real estate investment trust (REIT) listing in Shenzhen, having received approval from the Hong Kong Stock Exchange. The company announced yesterday that it can proceed with the proposed separation of CICC Cainiao Logistics Warehouse Infrastructure REIT on the Shenzhen Stock Exchange. The REIT will be managed publicly by CICC Fund Management.

The primary asset involved is Jiaxing Park, a logistics and warehousing hub situated in Jiaxing, Zhejiang Province. It is owned by two subsidiaries of the company’s logistics division, Cainiao Smart Logistics Network: Jiaxing Chuanxiang Logistics Network Technology and Jiaxing Chuanyun Logistics Network Technology.

Following the completion of this spin-off, Jiaxing Park will be removed from the company’s balance sheet and become a REIT asset owned collectively by public market investors.

The company has already submitted its application for the Infrastructure REIT to the China Securities Regulatory Commission and the Shenzhen Stock Exchange, sources close to the company disclosed.

Since China launched its REIT pilot program in 2020, several businesses in logistics and related sectors have either completed or advanced their logistics REIT initiatives.

This spin-off is expected to have minimal effect on the company’s overall operations. It serves primarily as a strategy to revitalize heavy assets, according to industry expert Zhao Xiaomin. Additionally, it provides Cainiao, which has been burdened by substantial costs due to global expansion and technological investments, with an independent financing channel supported by its assets.

Located in the Yangtze River Delta, Jiaxing Park features high occupancy rates, efficient operations, and steady cash flow, Zhao noted. The REIT listing will also help unlock the asset’s value, providing further financial flexibility.

Zhao remains optimistic about Cainiao’s prospects for its public REIT issuance. He believes that REITs backed by e-commerce or industrial park warehousing assets have strong market potential.

Looking ahead, more industrial parks could be added to REIT portfolios, creating a healthy cycle of capital growth. For instance, similar warehousing and logistics REITs associated with JD.com underwent capital expansion shortly after their issuance.

Note: Original editor and publication references have been omitted as requested.