(Yicai) April 28 -- Chinese tech giant Alibaba Group has received approval from the Hong Kong Stock Exchange to spin off one of its infrastructure assets by seeking a real estate investment trust listing in Shenzhen.

The HKEX confirmed on March 13 that Alibaba may proceed with the proposed spin-off of CICC Cainiao Logistics Warehouse Infrastructure REIT on the Shenzhen Stock Exchange, the Hangzhou-based company said in an exchange filing yesterday. CICC Fund Management will serve as the public fund manager.

The underlying asset is the Jiaxing Park, a logistics and warehousing infrastructure park located in Jiaxing, Zhejiang province, owned by Jiaxing Chuanxiang Logistics Network Technology and Jiaxing Chuanyun Logistics Network Technology, two subsidiaries of Alibaba's logistics arm Cainiao Smart Logistics Network.

Once the proposed spin-off is completed, the Jiaxing Park will be divested from Alibaba's balance sheet and converted into a REIT asset collectively held by public market investors.

Alibaba has already submitted the listing application for Infrastructure REIT to the China Securities Regulatory Commission and the Shenzhen Stock Exchange, Yicai learned from a company insider.

Since the launch of China's REIT pilot program in 2020, several enterprises in the logistics and related sectors have completed logistics REIT offerings or advanced relevant projects.

The spin-off will have a limited impact on Alibaba as it is merely a measure for the company to revitalize heavy assets, Zhao Xiaomin, an express delivery expert, told Yicai. Moreover, it will grant Cainiao, whose operation is weighted down by heavy spending on global expansion and technological development, an independent financing channel backed by its own assets, he added.

Located in the Yangtze River Delta region, the Jiaxing Park boasts a high occupancy rate and operational efficiency, along with stable cash flow, according to Zhao. The REIT listing will also enable Cainiao to unlock asset value.

Zhao is optimistic about the prospects of Cainiao's public REIT issuance. He believes that publicly offered REITs backed by e-commerce or industrial park warehousing and logistics assets have promising market prospects.

More industrial parks can be incorporated into REIT assets in the future to form a virtuous capital cycle, Zhao said. For example, similar warehousing and logistics REIT assets under JD.Com completed capital expansion shortly after their issuance.

Editors: Tang Shihua, Futura Costaglione