CITIC working on China's first real estate securitization

Has to consolidate its capital base.

CITIC Securities, China's largest brokerage, plans China's first real estate securitization by selling some primary properties to raise at least US$817 million to consolidate its capital base.

CITIC said there will be a three-step securitization process. It will first transfer rights for two buildings in Beijing and Shenzhen and rights to related land parcels from two units in Tianjin.

It will sell all stakes in its Tianjin units to Citic Jinshi Fund Management Company for US$817 million. It will then rent offices in the buildings.

CITIC said that if the securitization succeeds, it stands to get stable income from the fund unit, which will launch a private equity fund for special innovative financial businesses.

China's State Council said in late August that China will expand a pilot program to let companies securitize assets.