China’s private REIT market is becoming a rare bright spot for cash-strapped developers — with a record $12B fundraising pipeline in 2025 as investors chase higher yields.
Launched in 2023 and open only to professional investors, private REITs offer faster approvals, looser requirements, and access to assets not allowed in public REITs — such as offices and hotels. This gives developers a crucial alternative as public markets remain largely shut.
Market Momentum
- 17 private REITs approved in 2025, raising 43B yuan ($5.9B) vs. 8B yuan last year.
- 40 new filings this year could raise 105B yuan, up sharply from 13B yuan in 2024.
- Average dividend yield: ~5%, higher than public REIT yields (3%–4%).
UBS’s John Lam calls private REITs a “game changer”, enabling asset monetisation despite China’s prolonged property downturn.
Who’s Issuing & Investing?
- Developers, industrial parks, and mall operators are increasingly using private REITs to unlock capital and ease liquidity pressure.
- Major investors: insurers and brokerage asset-management arms, drawn to income stability in a low-rate environment.
- Offshore groups including CapitaLand and Gaw Capital have filed applications.
Key Deals
- Seazen Group became the first private developer approved, raising 1.06B yuan via a mall-backed REIT at >6% implied yield, far above the 2.1% 30-year gov’t bond yield.
Challenges
- Distressed homebuilders lack high-quality, income-generating assets.
- Tier-1 office & logistics assets face high vacancies, with rent pressure likely until 2027.
- Private REITs won’t fully fix developer balance sheets — but they offer valuable liquidity relief.
Big Picture
China’s REIT market remains tiny — REITs account for just 1.4% of total property market cap vs. 90% in the U.S. and 95% in Australia — leaving massive room for growth.
Private REITs are now a critical bridge between capital needs and asset monetisation, reshaping funding strategies in China’s struggling property sector.