REIT ASIAPAC
Opinion
C-REITS GEARED FOR NEW GROWTH ERA
After passing the first lithmus test in their debut , C-REITs are now exposed to a further round of policies crucial for their continued development .
Photo by pixy . org
By Sigrid Zialcita , Asia Pacific Real Assets Association ( APREA ) CEO
China REITs ( C-REITs ) have made a sterling debut on the Chinese bourse , with the initial listings from the pilot programme displaying strong post-IPO performance . Price returns are so far up an average of 30 % since listing in June , outstripping the CSI300 over the same period . Oversubscribed during their offer period , it also indicated strong underlying demand for dividendrich stocks from investors in China ’ s US $ 12 trillion stock markets , at a time when the global economy continues to reel from the impact of the pandemic .
In the aftermath of C-REITs debut , Chinese authorities followed with new guidelines , lifting geographical restrictions , and broadening the types of potential assets to include renewable energy , build-to-rent ( BTR ) housing , and significant tourist attractions . This effectively loosens the interpretation of critical infrastructure in the C-REIT framework . Its first batch of nine infrastructure REITs , which collectively raised RMB30 billion , were specific on what could be listed , permitting only infrastructure and industrial assets in specific geographies .
Cuts in banks ’ reserve requirements , which the country ’ s monetary authorities first made in July last year , no doubt helped . Earlier-than-expected pay-outs by some of the REITs have also further instilled confidence . The years of deliberation taken to evolve China REITs appear to have been well worth the wait , as the government effectively leveraged on the asset class to push its own social and economic agenda without opening its property markets to excessive risks .
NEW ROUND OF POLICIES
The developments indicate that the government ’ s rollout of C-REITs has so far passed an essential first-stage litmus test , and the further round of policies is crucial to sustaining the development of the asset class . The additional sectors for inclusion are thoroughly considered , with regards to the country ’ s familiar five-year plans . The inclusion of renewable energy assets , that explicitly excludes coal , is telling as it is central to its plans
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