China’s Sizzling REIT Project Offers A Haven In A Choppy Market (Bloomberg)
February 22, 2022 – China’s nascent real estate investment trust project looks well placed to continue its market-beating run as a renewed infrastructure push adds to its appeal.
An equal-weighted basket of 11 REITs backed by assets ranging from industrial parks to highways has surged 88% since its inception last year, and is up 16% since Jan 1.
China is experimenting with REITs to tap the world’s second-largest equity market to finance projects that local governments would otherwise have to fund. A recent pledge to accelerate urban development adds to corporate tax breaks and a call to fast-track infrastructure REIT applications.
Eleven trusts launched since June raised a total of 36.4 billion yuan ($5.7 billion), according to CITIC Securities as investors snapped up the shares. Top performers include Fullgoal Capital Water Close-end Infrastructure Fund — linked to a waste-water treatment project in eastern Anhui province — that has nearly doubled in the eight months since its launch, while the benchmark CSI 300 index lost nearly 9%.
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