HONG KONG, March 22 (Reuters) - Beijing-based developer Longfor Properties said on Thursday it has sold 3 billion yuan ($474.53 million) of bonds to the public for its long-term rental residence business, the first in China.
Developers have been rushing into the securitisation and debt market since the second half of last year to raise funds for the policy-supported but low-return sector.
Longfor, the eighth largest developer by sales in the country, said the coupon rate of the five-year bonds is 5.6 percent.
The proceeds will be used for the construction of the long-term rental apartment projects in first- and second-tier cities such as Shanghai and Chengdu. Longfor had over 15,000 rooms across 17 cities for long-term leasing as of the end of 2017.
“The bond issuance will provide targeted financing solutions for enterprises that engage in rental apartment services and will ease the financing difficulties in the apartment leasing industry,” the company said in a statement.
China announced plans in August to launch pilot programmes in 13 major cities, including Beijing and Shanghai, to build rental housing projects in an effort to ease a housing shortage.
Larger peer Country Garden said last month it has obtained regulatory approval to launch 10 billion yuan worth of quasi-Real Estate Investment Trusts (REITs), the largest so far in the rental housing industry and the quasi-REITs market.
$1 = 6.3220 Chinese yuan renminbi Reporting by Clare Jim; Editing by Shri Navaratnam