Chinese city to set up $1.5b real estate fund to ease residential market distress

A 10 billion yuan ($1.47 billion) real estate fund is in the works in Zhengzhou, the capital of Central China’s Henan Province.

According to Global Times, Zhengzhou is the first Chinese city to implement a regional real estate fund, following the suspension of loan repayments for unfinished projects by a number of Chinese homebuyers. The new real estate fund will be established and operated under the guidance of the government.

The source of the funds consists of two parts: First, the Zhengzhou National Central City Fund, operated by the Zhengzhou finance bureau, will set up a 10 billion yuan bailout fund as a parent fund. Second, a subfund will be set up with 30 percent originating from the parent fund and the remaining 70 percent of the fund coming from state-owned companies and social capital, including construction enterprises, asset management companies and financial institutions.