On December 6, 2019, the quasi-Real Estate Investment Trusts (REITs)—CITIC Goldstone-Chengdu Suning Plaza Asset-backed Securities (ABS), was successfully issued on the Shanghai Stock Exchange, with an issue size of CNY 1.9 billion and a product term of 18 years. The credit rating of priority A, B and C asset-backed securities is AAAsf. The original equity owner of asset-backed securities is Nanjing Suning Shangtong Enterprise Management Service Co., Ltd., and the underlying asset is “Chengdu Suning Plaza”.

 

This project is the first domestic shopping mall reissue of quasi-REITs in China. Prior to this issuance, “Chengdu Suning Plaza”, as the underlying asset, had established “Ping An Suning Plaza Asset-Backed Securities” (“Original quasi-REITs Product”). Through this issuance, the original quasi-REITs product was successfully withdrawn. As a reissue project with the same underlying asset, this project involved the termination of the original quasi-REITs product, the establishment of a new quasi-REITs product, and the connection between the two. The complex transaction arrangements and rigid issuance timeline brought new challenges to the issuers and intermediaries, including their legal advisers.

 

“Chengdu Suning Plaza” is located at No.8, North Section of Tianfu Avenue, High-tech Zone, Chengdu, the core of Xinnan Tiandi retail area, covering an area of 26,736.71 square meters.  

 

The site was completed in December 2011, renovated and re-opened in April 2014. “Chengdu Suning Plaza” operated successfully over the duration of the original quasi-REITs product, with annual net operating income increasing by more than 20% from 2016 to 2018. 

 

Suning, founded in 1990, has two listed companies; one in China and the other in Japan.  In China, it is a leading commercial enterprise with 250,000 employees. 

 

The Suning Holdings Group ranks third among the top 500 private enterprises in China and ranks second among the top 100 private enterprises in China in the service industry with revenue of CNY 602.5 billion.  In 2019 it ranked first in the online retail industry.

 

Suning is also a pioneer and important participant in China’s REITs market. Since 2014, Suning has issued 8 single quasi-REITs projects, including Suning Yunchuang ABS, Suning Yunxiang ABS and this project.  It has a cumulative issuance size  of CNY 23.5 billion, making it the enterprise with the largest quasi-REITs product in China.

 

After assisting China’s largest CMBS product “CICC-Sinar Mas Group Shanghai Arch Asset-Backed Special Plan” on its successfully reissue, Jingtian & Gongcheng once again acted as special legal advisers. Jingtian & Gongcheng participated in the legal due diligence, transaction structure design, adjustment as well as the drafting of legal opinions and transaction documents for this quasi-REITs reissue project. Jingtian & Gongcheng provided comprehensive, high quality legal services to its clients, demonstrating their profound understanding of and ability to grasp various forms of asset-backed securities products for commercial real estate.