How China’s growing Reit sector is giving foreign property investors a route back in
Foreign investors are starting to look again at mainland China’s commercial property market after years of retreat, drawn by sharply lower asset prices, wider yields and cheaper yuan financing, even though cross-border capital remains a small fraction of the overall market, analysts said.
The shift did not yet amount to a broad return of foreign money, they added.
Instead, some international investors were finding ways to participate through China’s domestic capital markets, using onshore financing and real estate investment trust (Reit) structures to invest in selected assets and create an eventual route to recycle their capital, analysts said.
“While cross-border capital mostly stays on the sidelines, the interest in re-engaging with mainland China’s commercial real estate market has been improving in the past 12 months, led by Asian investors,” said Glyn Nelson, head of capital markets research for the Asia-Pacific region at CBRE.
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