Information on the Target

The investment focus of this deal is the CICC Yizhuang Industrial Park REIT, which successfully debuted on the Shanghai Stock Exchange on June 26, 2025. This investment marks a significant milestone for Hongyi Real Estate as it continues to deepen its commitment to the industrial park sector, reinforcing its status as an expert in industrial park investment and operation. The REIT is aimed at enhancing the asset allocation strategy of the Hongyi Infrastructure Fund.

Strategically located in the Yizhuang area, which is a major hub for advanced manufacturing, the project is primarily engaged in supporting high-end automobile production and electric vehicles. The underlying assets include top-tier single-story standard factories that elevate the quality requirements for enterprises in this sector, catering specifically to intelligent and automated manufacturing processes.

Industry Overview in the Target’s Specific Country

China's advanced manufacturing sector is witnessing rapid growth and innovation, driven by substantial investments in new technologies. As a critical component of the national economy, advanced manufacturing encompasses various industries, including information technology, automotive, biotechnology, and robotics. The government is actively promoting modernization efforts within this sector, aiming for a significant increase in productivity and global competitiveness.

The Yizhuang area is at the forefront of this transition, acting as a development zone that aggregates global high-end resources and talents. It is a vital part of Beijing's strategy to foster a world-class advanced manufacturing industry cluster, which includes leading enterprises and supply chain partners essential for maintaining a competitive edge.

By concentrating on sectors such as new energy vehicles and intelligent manufacturing, the Yizhuang Industrial Park aligns with national goals to develop green technologies and promote sustainable economic models. The government's policies are also favoring capital inflows into sectors that demonstrate robust growth potential, thus presenting favorable market opportunities.

In addition to fostering specific industries, the local government supports infrastructure development investments that enhance the overall ecosystem. This creates a conducive environment for industrial growth, attracting both domestic and international firms looking for innovative solutions and collaboration opportunities.

The Rationale Behind the Deal

This strategic investment in the CICC Yizhuang Industrial Park REIT is primarily motivated by the rising demand for advanced manufacturing facilities and the long-term benefits of steady rental income from high-quality, well-located assets. The foundation of this REIT is a strong rental structure, with over 90% of leases extending beyond five years, that ensures stable cash flows and minimizes operational disruptions.

The initiative also aligns with China's commitment to bolster advanced manufacturing capabilities and support infrastructure development within this domain. By investing in this REIT, Hongyi aims to capitalize on the growing sector while positioning itself as a key contributor to the local economy’s development.

Information about the Investor

With a robust investment strategy that targets core areas with stable returns, Hongyi aims to create a resilient asset portfolio that accommodates market fluctuations while delivering consistent returns to investors. The fund's focus on professional management and operational excellence underlines its commitment to achieving long-term sustainability.

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The investment in the CICC Yizhuang Industrial Park REIT represents a promising opportunity within the rapidly growing advanced manufacturing sector in China. As this industry continues to evolve, the demand for industrial real estate that supports innovation and production is bound to increase, ensuring a sound investment proposition.

Moreover, with a strategic focus on high-quality assets and a supportive lease structure, the project is expected to generate stable cash flows that will appeal to investors seeking reliable returns. The underlying strength of the automotive supply chain within the Yizhuang area further enhances the operational resilience of this REIT.

Furthermore, the alignment with government initiatives aimed at supporting advanced manufacturing development adds a significant layer of credibility to the investment, making it not only financially attractive but also strategically relevant within the broader economic landscape.

Overall, investing in the CICC Yizhuang Industrial Park REIT could indeed be regarded as a wise decision, given its foundational strengths and the promising outlook for China's advanced manufacturing sector.

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