On February 10th, the first-ever pharmaceutical warehouse logistics REIT in the country, the Huatai Fuhua Jiuzhoutong Pharmaceutical Warehouse Logistics Closed-end Infrastructure Securities Investment Fund—also known as "Huatai Fuhua Jiuzhoutong Pharmaceutical REIT"—officially began its subscriptionAs institutions look towards 2025, experts suggest that robust policy support is expected to create broader developmental prospects for the REITs market in the coming year.

This launch marks the introduction of a significant new asset type.

According to the announcement, the fundraising period for the Huatai Fuhua Jiuzhoutong Pharmaceutical REIT runs from February 10 to February 11, aiming to raise a total of 400 million sharesThe strategic placement initially accounts for 300 million shares, constituting 75% of the total; the offline issuance consists of 70 million shares, making up 17.5%; while the public offering includes 30 million shares, which represents 7.5%. At a subscription price of 2.895 yuan per share and for the total offering of 400 million shares, if the fundraising is successful, the expected total funds raised would be approximately 1.158 billion yuanDuring the inquiry phase, the total amount of shares intended for subscription by various parties reached 501,850 million, which is a staggering 71.69 times the initial offline offering amount.

Publicly available data reveals that the project sponsor, the Jiuzhoutong Group, is a leading private pharmaceutical enterprise in the nation, renowned for its significant presence in the pharmaceutical distribution sectorThe original rights holder, Jiuzhoutong Logistics, operates as the first logistics enterprise in the pharmaceutical industry to achieve a five-star rating and boasts a vast infrastructure and service network covering over 96% of the countryThe underlying asset for this fund is the Jiuzhoutong Dongxihu Modern Pharmaceutical Warehouse Logistics Center, a facility that meets GSP quality standards

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This center employs advanced information technologies, intelligent logistics equipment, and digital management methods to ensure precise management and traceability of pharmaceuticalsSuch practices guarantee efficient and secure drug distribution, providing streamlined logistics services not only for Jiuzhoutong Group’s operations but also for its various partners across multiple industriesThis facility focuses on high-barrier, high-return pharmaceutical logistics, thereby handling premium-grade pharmaceuticals, distinguishing it from traditional logistics operations.

Industry insiders note that compared to conventional high-standard warehouses and other asset types in logistics, pharmaceutical logistics warehouse facilities represent a special category with a clear investment rationaleThis includes solid certainty of demand growth, which drives increased requirements for pharmaceutical storageThe sector's strong regulatory framework, elevated technical barriers, and stringent market entry conditions further underscore its attractivenessGiven that publicly offered REITs typically feature clearly defined business models, high income stability, and mandatory dividend payouts, they are suited to long-term fund allocations as 'safe assets'. In a low-interest-rate environment, such stable-income assets, characterized by their reliable dividend distributions, are anticipated to manifest superior market performance.

The range of assets accepted continues to expand.

According to data from Everbright Securities, as of January 31, 2025, the established public REITs cover a variety of sectors including industrial parks, warehousing and logistics, affordable rental housing, energy infrastructure, consumer infrastructure, transportation infrastructure, ecological conservation, and water conservancy facilities—totaling 60 products with nearly 170 billion yuan in total issuance scale (including expansion projects). Additionally, updates from the Shanghai and Shenzhen stock exchanges indicate that 22 new REITs are awaiting listing, of which 17 are first-time REITs and 5 are pending expansion REITs

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Beyond the Huatai Fuhua Jiuzhoutong Pharmaceutical REIT, numerous new projects are anticipated to enter the market this year, offering capital market investors a more diversified array of investment choices.

As the new year commences, there is momentum behind the issuance of real estate investment trusts (REITs) focused on boost for artificial intelligence, data centers, smart cities, and innovative technology industrial parksThis is aimed at reactivating existing assets and supports the digital transformation of traditional infrastructureFurthermore, around enhancing quality elderly financial products, supporting health and eldercare enterprises with access to equity and debt financing that meet specific criteria is a key focusThis exploration of using facilities such as elder care assets as underlying ones for asset-backed security and REIT issuance will open up new avenues for investment.

According to China International Capital Corporation (CICC) fund analysts, the regulatory framework centered around asset management for REITs will see more comprehensive oversightContinuous policy support for the REIT market is expected to enhance relevant laws and promote product innovationsOn the information disclosure front, the release of periodic reporting guidelines is anticipated to further refine and standardize REIT information disclosureThis will detail the operational state of the underlying assets, financial statements, and significant events more precisely, thereby intensifying the information disclosure responsibilities of all involved partiesIn terms of product issuance, standardization in asset review requirements will streamline and expedite product audits and compliance for underlying assets.

The activity level in the REITs market is expected to rise.

Looking towards 2025, CICC indicates that the REITs market will likely continue to expand as policies improve and the market maturesWith a normalized issuance mechanism, more first-time projects across various sectors such as cultural tourism infrastructure, elder care, and data centers are poised for breakthroughs

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