On May 12, 2017, “Harvest Gemdale Bridge 8 Asset Support Securities” received a letter of no objection from Shanghai Stock Exchange, which is the first asset securitization product of cultural creative park in the history of domestic ABS. In addition to its significance in financial innovation, this has opened a new financing channel for real estate enterprises specializing in light asset operation.

Project Overview

This project plans to issue a total amount of RMB 420 million Yuan, with a product period of 8 years. The mechanism of priority/secondary hierarchy will be applied. Therein, the priority includes 8 levels, all of which have been awarded the AAA rating by United Ratings. In terms of the design of product structure, Bridge 8 Project will apply the double-SPV structure. The bottom assets will be the rental income of the specific acreage of Bridge 8 Project in the forthcoming eight years. Based on the light asset traits, this project will not set up any real estate mortgage, which is rare among existing ABS products.Shenzhen Weixin under Gemdale Properties and Investment will serve as the original equity owner of this project. Wins Investment will serve as the transaction consultant of this project. Harvest Capital will serve as the planning manager. Kicers Weixinwill be responsible for the project operation and management. This project is now already in the stage of issuing, having been extensively recognized by investors.

Located in Xintiandi Business District, Luwan District, Shanghai Municipality, “Bridge 8 Project” covers an area of about 19,303 square meters. The site was once a piece of factory buildings in the French Concession before the Liberation. After the Liberation, the site became the old-fashioned industrial factory buildings of such state-owned enterprises as Luwan District SASAC, Shanghai Automotive Industry Corp. and Shanghai Sanzhi Dyeing Factory, etc. In the latter half of 2003, under the support of Shanghai Economy and Information Technology Commission and the People’s Government of Luwan District, Hong Kong Kicers Group took the lead in carrying out development, reconstruction, investment promotion and operation management to the old factory buildings, and turned the old factory buildings with unique historical and cultural connotation into a new carrier that attracts creative talents, arouses creative inspiration and concentrates creative industries. “Bridge 8 Project” has effectively promoted the local cityscape, supported the upgrading and transformation of traditional enterprises, created new tax and job growth points for the locality, and realized the balance between enterprise benefits and social benefits.

 In the process of project transformation and operation, several Party and state leaders visited Bridge 8 Project. The General Office of State Council, the People’s Government of Shanghai Municipality and the People’s Government of Luwan District offered policy support to the conversion of industrial factory buildings into a cultural creative park to different degrees respectively. In September 2016, Gemdale Properties and Investment completed the equity acquisition to the Project of Bridge 8 Cultural Creative Park, and officially incorporated this project into the management system of Gemdale. Thanks to the support of Gemdale Corporation and the innovative design of overall structure of Bridge 8 Project,this special plan of asset support has achieved an innovative effect of zero mortgage fundraising of light assets,thus adding a new road for urban renewal and the development of cultural creative park.

As the transaction consultant of asset support securities, Wins Investment conducted all-round analysis and measurement to the cash flow and solvency of this project, defined the pooled assets of the project, and conducted repeated discussion and explored an innovative solution to transaction structure, product structure and issuing scale, etc. together with the Capital Management Department of Gemdale Corporation and Gemdale Properties and Investment, and with the help of the operation management team of Kicers Weixin.

Brief Introduction to Business Partners

Gemdale Properties and Investment:Gemdale Properties and Investment (Group) Co., Ltd.is a company listed in the Hong Kong Stock Exchange (535.HK), and is also a group company which integrates residential buildings, commercial buildings, office buildings, industrial real estate, and innovative commercial investment, development and operation. The vision of Gemdale Properties and Investment is to be a first-rate real estate development enterprise and an excellent asset manager in China. As at 2016, the total assets, net assets and total land reserve of Gemdale Properties and Investment had reached about RMB 32.1 billion Yuan, RMB 11.6 billion Yuan and over 10 million square meters respectively. In 2016, the accumulative contracted sales volume and the accumulative sales area of Gemdale Properties and Investment reached RMB 20.15 billion and 1,123,500 square meters respectively.

WINS Investment:WINS Investment is a private equity fund management firm which engages in domestic and overseas real estate market investment. It has set branches in Beijing, Shanghai, Shenzhen and Wuhan. WINS Investment started exploring the field of real estate finance since 2006. In 2008, together with UBS, it set up the UG Fund, a US dollar fund, which is the first domestic standardized real estate fund in China. By the end of December 2016, the scale of RMB funds under the management of WINS Investment reached up to RMB 12.4 billion Yuan, and the accumulative US dollar fund management scale of WINS Investment reached 0.21 billion US dollars, equivalent to RMB 30.1 billion Yuan in whole.

 Harvest Capital:Established in 2012, Harvest Capital Management Co., Ltd. is one of the fund subsidiary companies which were established upon approval at the earliest time in China. The underlying assets of ABS products having been issued by Harvest Capital cover all categories of assets, e.g. real estate assets, stock creditor’s rights, receivables and trust beneficiary right, as well as several innovative cases of first orders in China. The Asset Securitization Team of Harvest Capital takes the lead in the industry in terms of the number of implemented projects, covered fields and industry influence. 

Kicers Weixin: Kicers Weixin Business Network Service (Shenzhen) Co., Ltd. is an open integrated service platform of commercial real estates jointly established by Kicers Group and Gemdale Properties and Investment, dedicated to multi-dimensionally exploring the boutique model of commercial real estates in the context of industrial upgrading, and establishing a new ecological alliance of commercial real estates integrating creative planning, investment & development, building & construction and operation & management, thus really promoting the healthy development of industry park and community business model. As a professional team with more than ten years of experience in creating low-density ecological parks, Kicers Group has been offering total solutions to projects with different building forms and different functional demands, and enabling them to effectively land for implementation. The company has participated in more than 30 planning and management projects of industrial parks in major cities nationwide, with a total floorage of over 2 million square meters.