Core Viewpoint - The article discusses the rapid development and increasing popularity of private REITs in China's multi-tiered REITs market, highlighting their unique product structure and risk-return characteristics, as well as the opportunities and challenges they present to various types of investors [1][2][3]. Summary by Sections Current Development of China's Multi-tiered REITs Market - Since the introduction of REITs in the 1960s in the U.S., the global market has expanded to over 40 countries, with the U.S. holding more than half of the global market capitalization. China's REITs market has also grown rapidly, forming a multi-tiered structure that includes public REITs, private REITs, and Pre-REITs, although private REITs and Pre-REITs are still developing more slowly due to challenges like limited exit channels and asset liquidity [2][3]. Growth of Public REITs - China's public REITs market, officially launched in April 2020, has quickly become the largest in Asia and the second largest globally. As of July 2025, there are 68 listed public REITs with a total issuance scale of 177 billion yuan and a market capitalization of 204.5 billion yuan. The underlying assets have diversified significantly beyond initial categories [4]. Market Potential of Pre-REITs - Pre-REITs serve as a bridge for acquiring and nurturing infrastructure or real estate projects before they transition to public REITs. They are expected to play a crucial role in creating a comprehensive multi-tiered REITs market, especially as policies and market understanding improve [5]. Rapid Growth of Private REITs - Private REITs in China are entering a rapid growth phase, with their concept emerging in September 2023. They are designed to be flexible and cater to high-net-worth investors, with a market value approximately half that of public REITs. The first private REIT was successfully issued in December 2023, marking its entry into the capital market [6][7]. Characteristics of Private REITs - Private REITs combine features of both public and private structures, allowing for a broader range of underlying assets and a shorter approval process. They are designed to be standardized products that rely on asset credit, offering higher yields compared to public REITs due to their flexible terms and conditions [9][12][14]. Investor Risk Preferences and Challenges - Various institutional investors, including insurance companies and banks, are increasingly recognizing private REITs. However, they face challenges such as long investment horizons, fluctuating returns, and difficulties in exit strategies and valuation [20][24]. Recommendations for Development - To enhance the private REITs market, recommendations include improving market liquidity through a market maker system, optimizing the expansion mechanism, incentivizing operational management, establishing robust exit mechanisms, and enhancing information disclosure to build investor confidence [28][29][30][31][32].

Policy and Market Overview - In 2025, the issuance of CMBS/CMBN and REITs is driven by the need to revitalize existing assets and reduce liabilities, supported by policies promoting a multi-tiered REITs market[4] - The issuance market remains robust with a total of 76 transactions from January to July 2025, reflecting a year-on-year increase of 35.71%[7] - The total issuance scale reached 1026.75 billion CNY, up 21.36% year-on-year, indicating strong financing demand[7] Issuance and Performance Metrics - The proportion of CMBS/CMBN and REITs in the ABS market was 8.95%, showing a slight year-on-year decline[7] - The average issuance rates for AAAsf and AA+sf rated securities were 2.44% and 2.66%, respectively, down 36bps and 95bps from the previous year[19] - The average issuance rate for AAAsf rated REITs was 2.40%, slightly lower than the 2.48% for CMBS/CMBN, maintaining a consistent spread of 8bps compared to the previous year[20] Asset and Investor Insights - Local state-owned enterprises accounted for nearly half of the actual issuers, with city investment enterprises primarily issuing CMBS/CMBN products[23] - The diversity of underlying assets has increased, with significant contributions from shopping malls, parks, and energy assets, each accounting for over 15% of issuance[17] - The number of projects with specific identifiers increased significantly, with 22 projects identified, including 11 related to green initiatives[9] Future Outlook - The low interest rate environment is expected to persist, with a continued trend of narrowing spreads anticipated in the second half of 2025[34] - The market for holding-type real estate ABS is expected to expand, with nearly 20 projects currently in the review stage for issuance[35] - The competition in the office and industrial park sectors is intensifying, with high vacancy rates projected to continue due to limited demand[36]

Core Viewpoint - The Chinese public REITs market has shown strong growth since its inception four years ago, driven by supportive policies and increasing investment demand, positioning itself as a significant asset class in a low-interest-rate environment [1][2][7]. Market Overview - The market has entered a policy dividend period, with the market capitalization of public REITs exceeding 200 billion yuan, comprising 66 projects, the highest in the Asia-Pacific region, indicating robust development momentum [2][7]. - New asset types have received high subscription multiples, reflecting strong market recognition and positive sentiment [2][7]. - The issuance of holding-type real estate ABS has contributed to the construction of a multi-tiered REITs market, with 8 issuances totaling 13.603 billion yuan as of June 13, 2025 [2][9]. Future Market Development Outlook - The expansion of asset types and acceleration of initial and follow-on offerings are anticipated, with new asset types such as data centers and senior living facilities enriching the market ecosystem [3][24]. - The construction of a multi-tiered REITs market is deemed necessary, focusing on differentiated product systems based on the development stage of underlying assets and varying investor risk preferences [3][25]. - Increasing the diversity of the investor base, including public funds, pension funds, and foreign capital, is recommended to enhance market liquidity [3][27]. Investment Attractiveness - The attractiveness of REITs as an investment is gradually increasing, with the secondary market valuation rebounding from the bottom [2][12]. - As of June 13, 2025, the overall return rate of the public REIT market was 17.4%, with the P/NAV ratio rising from 1.09x to 1.33x, indicating a strong demand for REITs in the current low-interest-rate environment [12][36]. Strategy Outlook for the Second Half of the Year - The REITs market is expected to maintain high valuations due to ongoing demand, although further upward movement will require additional catalysts [4][36]. - Key strategies include focusing on long-term holdings of quality assets, participating in new offerings, dividend trading, and navigating lock-up periods [4][36][41].

Core Insights - The Chinese public REITs market has shown strong growth since its inception in 2021, with a market capitalization exceeding 200 billion yuan and 66 projects listed, making it the largest in the Asia-Pacific region [2][7][11] - The market is currently in a policy dividend period, supported by favorable regulations and increasing investor recognition, particularly in a low-interest-rate environment [6][4] - The investment attractiveness of REITs is gradually increasing, with a rebound in secondary market valuations and a year-to-date return of 17.4% as of June 13, 2025 [14][4] Market Development Review - The market has benefited from progressive policies, including the issuance of the National Development and Reform Commission's 1014 document, which has laid a foundation for sustainable growth [6][2] - New asset types, such as data centers and senior living facilities, are gaining traction, with significant oversubscription rates for recent projects, indicating strong market demand [7][11] - The issuance of holding-type real estate ABS has reached 13.603 billion yuan, contributing to the development of a multi-tiered REITs market [11][14] Future Market Outlook - The expansion of asset types and the acceleration of initial offerings and expansions are expected to enhance the market ecosystem, providing diverse investment options for investors [25][26] - The construction of a multi-tiered REITs market is deemed necessary to cater to varying risk preferences and asset development stages, covering the entire lifecycle from cultivation to exit [27][28] - Increasing the diversity of the investor base, including public funds and foreign capital, is essential for enhancing market liquidity and depth [29][4] Investment Strategy - In the context of low interest rates and an "asset shortage," the REITs market is viewed positively for the second half of the year, although valuation risks should be monitored as the market valuation center rises [4][37] - Strategies such as primary market participation, dividend trading, and expansion gaming are recommended for investors to optimize returns [42][46][49] - The market's performance is expected to be influenced by new issuances and unlockings in the second half of the year, with a total of 28 projects involving 26.8 billion yuan set to unlock [40][41]

Core Viewpoint - The recent meeting of the Asset Securitization Business Committee of the China Securities Investment Fund Industry Association emphasizes the development of holding-type real estate ABS, which is gaining momentum under policy support [1]. Mechanism Innovation - Since the first holding-type real estate ABS was launched in December 2023, the market has seen continuous expansion and quality improvement, with a total issuance scale exceeding 160 billion yuan by May 17, 2025 [2]. - The financial regulatory authorities allow asset-backed special plans to retain external liabilities and do not require a set expected return rate, which enhances the flexibility of these products [2]. - The holding-type real estate ABS can revitalize existing assets and provide capital for new projects, creating a virtuous investment cycle [2]. Policy Coordination - The support for holding-type real estate ABS has evolved from a broad framework to detailed regulations, forming a multi-tiered product system that includes public REITs and holding-type real estate ABS [4]. - Holding-type real estate ABS serves as a "nursery" for public REITs, nurturing projects and investors, ultimately leading to the issuance of public REITs [4]. - Both holding-type real estate ABS and public REITs share similar operational mechanisms, raising funds through a fund structure and investing in capital-intensive sectors [4][5]. Expansion Outlook - The asset scope of holding-type real estate ABS is broad, including highways, energy, scenic spots, and various types of real estate, indicating significant potential for further expansion [8]. - The renewable energy sector is highlighted as a promising area, with wind and solar power installations growing over 15% annually, providing stable cash flows and serving as quality underlying assets [7]. - Three potential growth areas are identified: data centers, long-term rental apartments, and commercial properties, all of which require ongoing support from the capital market [7].