With the first wave of commercial Chinese real estate investment trusts (REITs) set to launch in the next two years, Greater Bay Area assets are likely to be in strong demand, according to Deloitte China.
“GBA assets will likely be oversubscribed,” according to Ryan Wu, deputy managing partner for Hong Kong Chinese enterprises services with Deloitte China. He was speaking at the recent APREA GBA Conference on the fast-growing C-Reits market, which has recently expanded to include commercial properties.
On December 1, China’s top economic planning agency, the National Development and Reform Commission (NDRC), released an updated eligibility list for C-REIT programmes, adding commercial real estate such as shopping centres, hotels and office buildings that can be securitised and sold to investors. The list now covered over 10 categories, ranging from industrial estates and data centres to government-subsidised rental housing projects.
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At a recent press conference, an NDRC representative said the aim of the expansion was to “better promote the role of infrastructure Reits in supporting the real economy”, aligning with China’s broader push for high-quality urban development, urban renewal and measures to boost consumption.
China’s pilot C-REITs, also called infrastructure REITs, were launched in 2021, allowing publicly offered funds to invest in income-generating infrastructure assets and distribute returns to investors from the underlying operating cash flows.
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By the end of last month, China had nearly 80 C-REITs that have raised more than 200 billion yuan (US$28.3 billion), according to Cushman & Wakefield.
“China’s REIT market has demonstrated remarkable growth, expanding its market value by approximately 85 per cent last year and securing a position among the top three REIT markets in Asia for the first time in 2024,” said Francis Li, international director and head of capital markets in Greater China for the firm.