The Rise of China REITs

Total of 24 infrastructure and real estate REITs listed in China
Significant growth since the first launch in 2021
Demand for C-REITs portfolio managers is increasing

In November, the Hong Kong borders opened and in January, China followed suit after COVID swept across the country for the last 36 months, showing the global community that Greater China is open for business. There is no doubt that the infrastructure and real estate industry will rebound, given the sheer amount of resources and hard assets that are available in the country which means that the potential for further growth is enormous.

REITs are publicly-listed trusts backed by real assets and produce stable yields for investors based on cash flows from a collection of properties or infrastructure assets. The first batch of REITS in China were launched in 2021, with a total of 24 infrastructure and real estate REITS as of March 2023. The continued rise of C-REITs show how the China real estate market has evolved in 2022 and will create opportunity for both onshore and offshore investors in 2023. One of the key advantages of setting up REITs is that it will enable the sector to adopt a long-term asset management strategy. In other words, a more stable and healthy market.

Most properties backed REITs are associated with industrial parks, warehouses and rental housing in China. For example, CIIC GLP REIT, Huaan Zhangjiang Guangda Park REIT and CICC Xiamen Anzhu Rental Housing REIT etc. Another industrial real estate giant ESR received HKSE’s approval on a proposed spin-off and a potential listing of 3 logistics assets through a C-REIT on the Shanghai Stock Exchange on 6th March 2023. Hence, onshore listed trusts continue to grow in the next few years in China.

So, what does this all mean in terms of recruitment for the Greater China real estate market?

Onshore C-REITs are regulated by with Shanghai Stock Exchange or Shenzhen Stock Exchange. Companies need to go through a lengthy application process to fulfil the compliance requirements. Each C-REIT are managed by two licensed portfolio managers who are responsible for disclosing any changes, new investments and performance of the C-REITs to the public.

The demand for experienced C-REITs portfolio managers has been increasing, especially those who have successfully launched and managed a C-REIT. The portfolio managers can come from a background of asset management, investment or capital raising professionals in real estate industry. However, it does not mean that only those who a have track record setting up a C-REIT will be qualified to work as a portfolio manager. In fact, having a good understanding of the listing regulations and procedures, and a strong onshore banking network are also desirable for C-REIT hiring managers in China. We also see the demand for investor relations professionals to manage relationships in the public markets.

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