25-07-2025
China Reits make ‘significant turnaround', with growth outpacing regional peers: Aprea
[SINGAPORE] Chinese real estate investment trusts, or C-Reits, have outpaced some of their regional peers, including Singapore's, in the first half of this year.
The performance of C-Reits this year reflects a 'significant turnaround' for an asset class that had plunged to record lows at the start of last year amid a slowing Chinese economy and real estate sector, said the Asia Pacific Real Estate Association (Aprea).
From January to June 2025, the CSI Reits Total Return Index, which tracks the total returns of C-Reits, rose 14.2 per cent, higher than the 8.5 per cent returns posted by the GPR/Aprea Composite Reit Index, which tracks real estate securities in 12 Asia-Pacific countries and territories.
Its performance is in contrast to last year, when the CSI Reits Total Return Index consistently lagged behind the GPR/Aprea Composite Reit Index.
When compared to individual countries, the total returns of C-Reits were also ahead of the returns in Singapore (6 per cent), Malaysia (10.8 per cent), Japan (10.1 per cent), India (10.1 per cent) and Australia (10 per cent).
C-Reits also outperformed the broader Chinese market between January and June: the SSE Composite Index, the stock market index for the Shanghai Stock Exchange, posted a 2.8 per cent growth over the same period.
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Aprea, which advocates for the real estate sector in the region, said that yield-seeking investors drove the sector's growth. A rally in Chinese tech stocks due to growing interest in artificial intelligence also fuelled optimism over the expansion of digital infrastructure assets.
Housing, highway and data centre C-Reits, in particular, performed well, said Sigrid Zialcita, the chief executive officer of Aprea.
Affordable housing C-Reits performed strongly due to supportive government policies; highway Reits that own toll roads generate stable and long-term cash flows, appealing to investors.
The upcoming listing of data centre C-Reits will generate more vibrancy in the sector, added Zialcita. She noted that data centre Reits GDS and Southern Runze Technology Data Center Reit were oversubscribed and issued at the top of their price ranges this year.
C-Reits are a relatively new asset class, with the first nine Reits debuting in China just four years ago. There are now 68 C-Reits listed on China's exchanges with a market capitalisation of more than US$20 billion.
Zialcita said that yields of C-Reits have grown as China's monetary authorities embark on an easing cycle.
'While this has compressed of late, investors remain conscious that their defensive characteristics make C-Reits a vital component of an investment portfolio, particularly now when uncertainty is skyrocketing,' she said.
Hong Kong leads Reit returns
Despite their recent performance, the total returns for C-Reits lagged those of Hong Kong (22 per cent) and the Philippines (14.6 per cent) between January and June this year.
Hong Kong Reits were buoyed by their potential inclusion in China's stock connect schemes, as well as a bullish stock market. Reits in the Philippines also did well following interest rate cuts by the Philippine central bank and asset injections by Philippine Reits, Zialcita noted.
Dividend yields for C-Reits were, however, behind those of regional peers. Data from Aprea indicated that the yield for C-Reits as at June 2025 was 5.4 per cent, lower than Singapore-listed Reits (6.3 per cent), Hong Kong Reits (6.7 per cent) and Malaysia Reits (5.8 per cent).
