Public REITs flourish in multiple areas; the independent major asset class foundation is expected to be solidified.

Data Source: Wind Yu Shipeng / Table Source: AI Generated

Securities Times Reporter Yu Shipeng

Recently, there have been three major developments in public REITs: reporting of the first batch of coal-fired power projects, selection of fund managers for elderly care projects, and continuous expansion of commercial real estate projects. From the review by Securities Times reporters, as the normalization of expansion continues to deepen, the revitalized assets are becoming increasingly abundant, showing multi-platform collaboration and linkage effects between primary and secondary markets. As of May 8, the total reported scale of commercial real estate REITs exceeds 60 billion yuan, surpassing the total issuance of REITs in the entire last year; the expansion to over 20 park projects covers high-quality assets such as China Merchants Shekou and Beijing Yizhuang.

Sources interviewed told reporters that public REITs are shifting from asset issuance to capital circulation, moving from quantity to quality verification, and the positioning of independent major asset classes is expected to be thoroughly solidified. Under factors such as low interest rates, asset under-allocation, long-term capital inflows, and hedging needs, the logic for incremental capital entering the market still exists. Identifying the reasonableness and stability of the cash flow of underlying assets will be more critical than simply chasing market scale expansion.

Commercial Real Estate REITs

Potential issuance this year could reach 2.48B yuan

On May 8, E Fund announced the establishment of Guangxi Beitou High-Speed REIT, with a fundraising scale of 2.475 billion yuan. The REIT was only offered for one day, and the public offering portion was oversubscribed, leading to early closure (allotment ratio of 0.31%), marking another “one-day sell-out” phenomenon in the public REITs field. Additionally, on May 6, Great Wall Fund filed for its first public REIT product, Great Wall China Power Coal-Fired Power REIT, along with Huaxia China Resources Power Coal-Fired Power REIT filed on the same day, becoming the market’s first batch of coal-fired power public REITs.

Furthermore, progress has been made on elderly care REIT projects. According to public reports, Beijing Beikong Urban Development Group recently conducted a public tender for fund managers and financial advisors for an elderly care public REIT project, covering the entire process from application and issuance to ongoing management. The tender requirements specify that the project leader must have over five years of relevant experience and REIT issuance cases, with at least four team members.

Last week, there was also new progress in commercial real estate REITs. On May 6, Red Soil Innovation Fund’s application for Red Soil Innovation Maoye Commercial Real Estate REIT was accepted. According to Wind data, commercial real estate REITs appeared at the beginning of this year, and as of May 8, the number of accepted applications reached 20, from 13 fund managers. The most applications came from Huaxia Fund (4), followed by CICC Fund and Huaxin Fund with 2 each, and others including Chuangjin Hexin Fund, Everbright Prudence Fund, CITIC Construction Investment Fund, and Guolian An Fund among small and medium-sized public funds. Chuangjin Hexin Fund’s application for Chuangjin Hexin Beijing State-Owned Assets REIT is the country’s first “urban renewal + technological innovation” REIT, now in the inquiry stage.

“These 20 commercial real estate REITs have a total reported scale exceeding 60 billion yuan, surpassing the total infrastructure REIT issuance for all of 2025, showing features of ‘large scale, high-quality assets, diverse entities, and innovative models.’ The applicants include central enterprises, state-owned enterprises, private companies, and foreign investors, covering asset types such as shopping centers, complexes, and hotels. It is expected that many projects are still in the pipeline, and the total issuance scale of commercial real estate REITs for the year could reach trillions of yuan, effectively revitalizing commercial assets worth trillions,” said Chuangjin Hexin Fund to Securities Times.

Ten Asset Types Underlying Projects Continue to Enrich

Including the aforementioned products, as of May 8, nearly 130 public REITs are in the market. According to Wind statistics, these products are spread across ten major asset categories. The coal-fired power products mentioned earlier belong to energy infrastructure, along with categories such as commercial real estate, water conservancy facilities, and municipal facilities.

Looking ahead, as the underlying assets continue to expand, the projects revitalized by public REITs are also increasing. For example, on May 8, Huaxia Fund filed for Huaxia Shudao Group Expressway REIT, the 17th transportation infrastructure REIT in the market, covering assets such as Hebei Expressway, Yuexiu Expressway, Anhui Traffic Control Expressway, and Nanjing Traffic Expressway. Among the over 20 park infrastructure REITs, assets include Xiamen Torch, China Merchants Shekou, Beijing Yizhuang, and Suzhou Industrial Park. The 20 commercial real estate REITs already filed include assets such as Intime Department Store, CapitaLand, China Resources Land, Poly, Galaxy Group, and COFCO.

Further, the deepening expansion of public REITs involves multi-platform collaboration and linkage effects between primary and secondary markets. For example, the Pre-REIT product “Shenzhen-Zhaorong No. 1 (Shenzhen) Infrastructure Private Equity Fund,” initiated by Zhaorong Capital (a wholly owned subsidiary of China Merchants Fund) and ShenZhenDian Group, was filed in the first quarter of this year. This Pre-REIT mainly invests in new energy, computing power, energy storage, and quality real estate, primarily exiting through public REITs. Behind this is the coordinated effect within the China Merchants system, involving China Merchants Fund, China Merchants Bank, China Merchants Securities, China Merchants Capital, and China Merchants Cigna, forming a full-process, multi-level REIT ecosystem covering asset acquisition at the Pre-REIT stage, asset cultivation at the private REIT stage, and listing at the public REIT stage.

Boshi Fund’s REITs Business Operations Director Liu Xuan told Securities Times that since 2021, China’s REITs market has shifted from pilot projects to normalization, moving from infrastructure to real estate. This is not only an increase in product quantity but also a systemic reshaping of market depth and breadth. From “quantity” to “quality,” the structural support and scale value can be attributed to the diversification of asset classes and the normalization of the “initial issuance + follow-up fundraising” mechanism. Meanwhile, the ecosystem expansion involving participants and capital sources also provides solid support for the market’s scale leap.

From Asset Issuance to Capital Circulation

The leap from quantity to quality verification in public REITs is reflected not only in asset expansion but also in the “vote” of market funds after listing.

Since the second quarter, public REITs have begun to be included in “Fixed Income+” products, becoming another source of funds after FOF (funds of funds). According to institutional estimates, assuming the issuance of hybrid bond secondary funds remains consistent with 2025, and the allocation to public REITs is 1%, these funds could bring about 1.8 billion yuan of potential capital to the REITs market from April to December 2026. Looking at full-year data, by the end of 2025, there are 207 public FOFs holding 38 public REITs, with a total holding of over 95.1 million units, an increase of over 80% from mid-2025’s 51.98 million units. Additionally, brokerage institutions’ proprietary funds held a market value equivalent to 53% of circulating REITs in 2025, with insurance institutions holding about 20%, totaling over 70%.

“The REITs market ecosystem is shifting from asset issuance to capital circulation,” Liu Xuan said. “Public REITs are now not only an asset listing platform but also a core hub of the real estate financial ecosystem.” As investor structures evolve from strategic allocations to index-based investments, and as the ecosystem of capital sources expands and the development of REITs indices and derivatives is anticipated, the positioning of public REITs as a major asset class is expected to be thoroughly solidified.

However, in the secondary market, the overall performance of public REITs this year has been moderate. As of May 8, the average increase was 0.2%, with the maximum rise at 10.12% and the maximum decline at 12.28%. Liu Xuan believes that participants in the public REITs market, amid the continuous growth of market scale, should prioritize identifying the reasonableness and stability of underlying asset cash flows over simply chasing market scale expansion.

Senior Strategy Analyst Wang Chaoping of China Merchants Fund told Securities Times that the strengthening of equities and the rebound in risk appetite continue to suppress liquidity and trends in REITs. However, factors such as low interest rates, asset under-allocation, long-term capital inflows, and hedging needs support the market. The logic of incremental funds entering through securities firms’ proprietary trading and insurance remains, and the high dividend attribute and relatively controllable drawdowns give REITs high asset allocation value. Short-term overselling may attract some allocation funds to support quality projects. Additionally, demand-side policies (such as index products, public offerings, and loosening of social security and pension investments in REITs) are expected to be gradually introduced.

(End of translation)