China Reits see ‘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 is a “significant turnaround” for an asset that had plunged to record lows at the start of last year amid a slowing Chinese economy and real estate sector, said 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 across 12 Asia-Pacific countries and territories.

Its performance is in contrast to last year, where the CSI Reits Total Return Index consistently lagged behind the GPR/Aprea Composite Reit Index.

When compared across individual countries, the total returns of C-Reits are also ahead of Singapore (6 per cent), Malaysia (10.8 per cent), Japan (10.1 per cent), India (10.1 per cent) and Australia (10 per cent).

The C-Reits also outperformed the broader Chinese market between January and June this year, with the SSE Composite Index, which is the stock market index for the Shanghai Stock Exchange, posting a 2.8 per cent growth over the same period.

Aprea, which advocates for the real estate sector in the region, said that yield-seeking investors have driven the sector’s growth. A rally in Chinese tech stocks due to growing interest in artificial intelligence has also fuelled optimism over the expansion of digital infrastructure assets.

Housing, highway and data centre C-Reits, in particular, have performed well, said Sigrid Zialcita, the chief executive officer of Aprea.

Affordable housing C-Reits have performed strongly due to supportive government policies, while 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 as well as 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 currently 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 the recent performance, the total returns for C-Reits lagged behind that of Hong Kong (22 per cent) and the Philippines (14.6 per cent) between January and June this year.

Hong Kong Reits have been buoyed by their potential inclusion into China’s stock connect schemes, as well as a bullish stock market. Meanwhile, the Philippines’ Reits have also performed well due to interest rate cuts by the Philippine central bank and asset injections by Philippine Reits, said Zialcita.

Yields for C-Reits were also behind that of regional peers. According to data from Aprea, the dividend yield for C-Reits as at June 2025 is 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).