REITs expanding into commercial real estate

This article is reprinted from: Economic Daily

Staff Reporter Zhao Dongyu

Recently, the first batch of commercial real estate REITs (Real Estate Investment Trusts) projects have officially submitted applications and been accepted by the China Securities Regulatory Commission and the stock exchanges, marking the official expansion of China’s REITs market asset types into the commercial real estate sector.

Commercial real estate REITs refer to closed-end publicly offered securities investment funds that hold commercial properties to generate stable cash flow and distribute earnings to fund unit holders. From the development experience of mature global markets, commercial complexes, retail properties, office buildings, hotels, and other commercial real estate are important underlying assets for REITs. China has a large stock of commercial real estate, with an inherent need to activate and broaden equity financing channels through REITs. Driven by relevant policies, the multi-level REITs market is accelerating its formation, with a supply side that has already established a diversified product system including infrastructure REITs, inter-institutional REITs, and commercial real estate REITs.

Dongyuan Investment Chief Analyst Liu Xiangdong stated that the application and approval of the first batch of commercial real estate REITs projects mark a key expansion of China’s REITs market from infrastructure to commercial real estate, an important measure to implement the policy idea of “activating existing assets and expanding effective investment.” By securitizing commercial real estate such as shopping centers, office buildings, and hotels, it can provide new equity financing channels for enterprises and guide social capital to participate in the real economy, thereby optimizing resource allocation.

Specifically, the first batch of 10 commercial real estate REITs applications includes 9 listed on the Shanghai Stock Exchange and 1 on the Shenzhen Stock Exchange, involving projects from Poly Developments, Jinjiang International Group, Shanghai Real Estate, Lujiazui Group, CapitaLand, Vipshop, Shazhi Chuan, and Yintai Department Store. The participating entities include central enterprises, leading local state-owned enterprises, high-quality private enterprises, and foreign-invested companies. The underlying assets cover commercial complexes, retail, office, and hotels, all located in core areas of cities such as Shanghai, Guangzhou, Shenzhen, Wuhan, Hefei, Xi’an, and Zhengzhou.

In terms of fundraising scale, the total proposed fundraising for the 10 commercial real estate REITs is 37.7 billion yuan. Among them, China International Capital Corporation’s Vipshop closed-end commercial real estate securities investment fund plans to raise 7.47 billion yuan; Guotai Haitong Shazhi Chuan closed-end commercial real estate securities investment fund plans to raise 5.064 billion yuan; Huaxia Yintai Department Store closed-end commercial real estate securities investment fund plans to raise 4.2785 billion yuan; Huitianfu Shanghai Real Estate closed-end commercial real estate securities investment fund plans to raise 4.002 billion yuan.

From the perspective of financial advisory institutions, the cooperating agencies for the first batch of commercial real estate REITs include CITIC Securities, Guotai Haitong, Huatai United Securities, China International Capital Corporation, and Shenwan Hongyuan, all top-tier brokerages.

“Compared to infrastructure REITs, commercial real estate REITs have more market-oriented rental income and asset appreciation logic. Their cash flows are more directly affected by economic cycles, consumption trends, regional competition, and other factors, which place higher demands on the asset management capabilities and market judgment of managers. Investors should pay attention to core risk indicators such as asset location quality, tenant stability, and lease contract duration,” Liu Xiangdong said.

At the end of last year, the China Securities Regulatory Commission issued the “Notice on Promoting High-Quality Development of the Real Estate Investment Trusts (REITs) Market,” and simultaneously released the “Announcement on the Pilot Launch of Commercial Real Estate Investment Trusts by the China Securities Regulatory Commission.” The Shanghai and Shenzhen stock exchanges also revised and issued public REITs business rules to support high-quality development of the REITs market. Recently, at the 2026 systematic work conference, the CSRC reiterated the need to “ensure the smooth implementation of the commercial real estate REITs pilot.”

The CSRC stated that it is important to recognize the significance of developing commercial real estate REITs. Promoting the development of the commercial real estate REITs market is an effective way to support the construction of new real estate development models through market mechanisms. It is of great significance for promoting the healthy development of the REITs market, enhancing the function of REITs, and continuously improving the inclusiveness and adaptability of the capital market system.