Hong Kong, July 25 (BNA): China will set up a real estate fund to help developers solve a stubborn debt crisis, aiming for a war of up to 300 billion yuan ($44.4 billion), according to a government bank official with first-hand knowledge. of the matter.
The person, who asked not to be identified due to the sensitivity of the matter, told Reuters that the fund’s size would initially be set at 80 billion yuan through support from the China Construction Bank and the People’s Bank of China.
If the model succeeds, he added, other banks will follow suit with the goal of raising as much as 200 to 300 billion yuan.
The source said that the fund will be used to finance purchases of unfinished home projects and complete their construction, and then lease them to individuals as part of the government’s efforts to promote rental housing.
Reuters has reached out to China Construction Bank, People’s Bank of China and China’s State Council for comment.
The latest news pushed the Hang Seng real estate index more than 5% early Monday, and it rose 3.4% by midday. The CSI 300 real estate index is up about 2.0%.
Financial information provider REDD first announced the details of the real estate fund on Monday.
REDD, citing unidentified sources, reported that the fund will support more than a dozen real estate developers, including the embattled China Evergrande group.
The report stated that the fund obtained 50 billion yuan from the China Construction Bank and a loan facility of 30 billion yuan from the People’s Bank of China, adding that it could be increased to between 200 billion to 300 billion yuan.
REDD said regulators and local governments will select developers who are eligible to receive support from the fund, adding that the fund can be used to purchase financial products issued by developers or finance state acquisitions of buyers on their projects.
The report said Beijing is also studying a national policy to issue special bonds for the redevelopment of shantytowns.
MI