A real estate investment trust under the umbrella of China’s JD.com has received approval to list on the Shanghai Stock Exchange, as the e-commerce company aims to lighten its investment burden with outside money.
China’s Securities Regulatory Commission announced the approval on Monday, though the timing of the listing is undecided.
JD.com is China’s second-largest online retailer after Alibaba Group Holding. The REIT approved for listing owns distribution warehouses in the Chinese cities of Chongqing, Wuhan and Langfang. The assets cover 350,000 square meters in total, with a combined value of 1.56 billion yuan (USD 224 million).
China debuted a market in 2021 for listing REITs, where investors can earn income from a trust’s rental properties. Similar to those in Japan and other countries, Chinese REITs are eligible for tax incentives because they pay more than 90% of their taxable income to shareholders.
Setting up logistics bases to improve delivery quality requires heavy spending for companies like JD.com, but adding money via a REIT can reduce that burden and increase investment capacity.
JD.com has improved delivery by managing its own logistics network, something that sets it apart from rival Alibaba, which mainly outsources. Same-day delivery is available in some large cities such as Shanghai.