Alibaba Plans to Spin Off Jiaxing Logistics Park, Issue REIT to Activate Assets

Alibaba announced on the evening of April 27th that the Hong Kong Stock Exchange has confirmed the company's proposed spin-off of infrastructure REITs on the Shenzhen Stock Exchange. The underlying assets are the JiaXing logistics park owned by Cainiao, held by two indirect subsidiaries of Alibaba. China International Capital Fund will serve as the public fund manager, and the relevant applications have been submitted to the China Securities Regulatory Commission and the Shenzhen Stock Exchange.

After the spin-off, the entity holding the JiaXing park will no longer be a subsidiary of Alibaba and will no longer be consolidated into its financial statements. Essentially, the heavy asset will be stripped from the balance sheet and will be transformed into an REIT asset held by public market investors.

Courier industry expert Zhao Xiaomin believes that this move has a limited impact on Alibaba as a whole and is more of a revitalization operation for heavy assets. For Cainiao, which is currently focused on international and tech businesses, it paves the way for an independent financing channel for its own assets. He notes that the JiaXing logistics park is located in the Yangtze River Delta, with a high overall occupancy rate and operational efficiency, stable cash flow, and current policies that encourage the issuance of public REITs for logistics and warehousing, making the timing rather favorable.

Previously, JD.com and SF Express have both completed their infrastructure REIT issuances. Zhao Xiaomin is optimistic about Cainiao's prospects this time and mentions that after the issuance of JD Logistics and Warehouse REIT, it has expanded its fundraising, forming a virtuous capital cycle, and Cainiao can follow this path to gradually package more parks into REIT assets.