Core Insights - The average rental prices in key cities in China continued to show a slight downward adjustment in Q3 2025, with a cumulative decline of 0.61% across 50 cities. The rental market is expected to enter a traditional off-season in Q4, influenced by stable demand and increased supply of rental housing [1][2][47] - The implementation of the "Housing Rental Regulations," the first national-level administrative regulation in the housing rental sector, marks a significant advancement in the legal framework of the industry, promoting professionalization and standardization [1][12][45] - The rental yield ratio in key cities has shown a slight increase, indicating improved returns on quality assets, with the average rental-to-price ratio rising to 2.21% as of September 2025 [9][47] Rental Price Trends - In Q3 2025, the average rental price in 50 cities decreased by 0.61%, with a monthly decline that expanded after the graduation season [2][4] - The average rental price in September 2025 was 34.74 yuan per square meter per month, reflecting a month-on-month decline of 0.39% and a year-on-year decline of 3.76% [2][4] - Among the 50 cities, 30 cities had rental prices between 20-30 yuan per square meter per month, while first-tier cities like Beijing, Shanghai, and Shenzhen maintained rental prices above 80 yuan per square meter per month [4][6] Policy Developments - The "Housing Rental Regulations" came into effect on September 15, 2025, establishing a legal framework for rental activities and enhancing market regulation [12][13] - Local governments are focusing on implementing central policies, emphasizing the collection and rental of existing properties to increase rental supply [19][21] - Financial support for the rental market is being enhanced, with the inclusion of market-oriented rental housing in public REITs, facilitating investment in the rental sector [17][36] REITs Performance - In Q2 2025, public REITs for affordable rental housing showed stable performance, with an overall income increase of over 5% [24][29] - The rental rates for market-oriented projects improved, with many projects achieving occupancy rates above 95% [29][33] - The preparation for the issuance and expansion of public REITs is progressing steadily, with plans for new projects and expansions in the pipeline [33][36] Long-term Rental Market Dynamics - The top 30 long-term rental apartment companies in China had a total of 1.398 million opened units by the end of Q3 2025, with significant contributions from real estate companies [41][42] - The management scale of these companies reached approximately 1.98 million units, indicating a robust growth trend in the sector [43][44] - The industry is expected to shift towards a focus on quality and service, driven by policies promoting the construction of high-quality rental communities [18][48]

Group 1 - The average rental price in 50 cities, including major cities like Beijing and Shanghai, was 31.94 yuan per square meter per month in July 2025, showing a month-on-month decline of 1.51% and a year-on-year decline of 4.42%, indicating weak market demand [1] - The traditional peak rental season during graduation has not materialized, leading to a continued downward trend in rental prices, with expectations of low-level fluctuations until the end of Q3 2025, particularly in non-core cities and suburban areas [1] - Long-term rental price trends in key cities will increasingly depend on substantial improvements in economic fundamentals and demand [1] Group 2 - The "Housing Rental Regulations" will take effect on September 15, 2025, establishing clear boundaries for the housing rental industry and promoting high-quality development [8] - The regulations aim to create a stable rental relationship between landlords and tenants, fostering a long-term and stable rental market demand [8] - The regulations are expected to attract more long-term capital into the housing rental market by standardizing market order and protecting the rights of both parties [8] Group 3 - In July 2025, 24 new rental projects were opened by sample enterprises, indicating a slight increase in the supply side of the housing rental market [10] - Notable new projects include the Xiaomi Beijing Youth Apartment, which opened with 2,658 units, designed to address the housing needs of young employees [13] - The shift towards B-end services in rental enterprises is expected to enhance stability in rental periods, predictable cash flows, and lower vacancy rates [14] Group 4 - Eight public rental housing REITs reported a total income of 180 million yuan and a net profit of 53.6 million yuan for the second quarter of 2025 [17] - The highest income and net profit were recorded by the Guotai Junan City Investment REIT, benefiting from high rental resilience and scale advantages in core Shanghai assets [17] - The average occupancy rate of the underlying assets of these REITs was 95.43%, with most projects maintaining high collection rates, indicating robust operational performance [19] Group 5 - As of August 19, 2025, all eight listed public rental housing REITs experienced price declines, with significant drops exceeding 10% for some [22] - Despite short-term market performance challenges, the long-term potential of the REITs market remains intact, driven by resilient rental income and dividend capabilities of core city assets [22] - The issuance of a new ABS by the Jianxin Housing Rental Fund, with a total amount of 600 million yuan, has been approved, indicating ongoing developments in the rental housing financing sector [22]