China Approves First IPOs Under Commercial REIT Regime as Pipeline Hits $8.7B

China’s securities regulator has approved the first IPOs under new rules which allow REITs backed by commercial properties, the opening wave of a deal pipeline that has swelled to more than RMB 60 billion ($8.7 billion) in the four months since Beijing launched the dedicated regime for office, retail and hotel assets.

The four vehicles, sponsored by state-owned developer Shanghai Land Group, discount retailer Vipshop, outlet mall operator Sasseur Group and state-owned conglomerate Beijing Grain Group, will list on the Shanghai Stock Exchange, according to the China Securities Regulatory Commission. The offerings are targeting RMB 18.6 billion in fundraising, based on exchange filings.

The commercial REIT regime, which is still positioned as a pilot programme, presents fewer regulatory hurdles than earlier versions for industrial and infrastructure assets, and has attracted applications from some of the largest property investors active in the China market, including CapitaLand Group, GIC-backed Chongbang Group, Fosun Group and hotel investor-operator  H World..

“China’s move into commercial REITs signals a shift toward a more streamlined approval process,” said James MacDonald, head of research for China at Savills, adding that broader eligibility and faster execution should support market growth.

Commercial REITs fall solely under CSRC oversight and do not require pre-listing approval from the State Council’s National Development and Reform Commission, simplifying the listing process. Zhongtai Securities estimates the market for commercial property REITS could reach RMB 800 billion to RMB 1.5 trillion.

Fast-Tracked

The four IPO approvals came roughly two and a half months after the sponsors applied for the listings, with the CSRC having officially launched the commercial REIT pilot on 31 December.

The new rules move China’s REIT framework beyond allowing for listings of properties as infrastructure assets, and allow for a more liberal mix of properties than was permitted under regulations introduced in 2023, which allowed for listing such as a CapitaLand mall REIT which debuted on the Shanghai exchange last year.

Of the four vehicles, Shanghai Land Group which has seeded its vehicle with a pair of towers at the Expo Riverfront in Shanghai’s Huangpu district, is the only trust featuring office assets.

Vipshop which has seeded its vehicle with properties in Zhengzhou and Harbin, and Sasseur, which is listing a trust holding a Xi’an asset, both specialise in outlet malls. Beijing Grain Group’s REIT is seeded with the Longde Plaza mall in the capital’s Changping district.

The four REITs’ estimated cash distribution yields for 2026 range from 4.75 percent to 6.22 percent.

“The launch of commercial REITs will help developers and owners unlock capital long invested in their assets and provide investors access to more China REIT asset classes,” said Jeremy Ong, a partner at Baker McKenzie in Hong Kong who leads the firm’s REITs practice. “The combined effect of this should, so long as the quality of the underlying projects remains high, facilitate greater activity in China’s real estate capital markets.”

Pipeline Swells

Including the four newly approved IPOs, Shanghai and Shenzhen exchanges have received 17 commercial REIT applications under the new guidelines with the proposed trust listings targeting more than RMB 60 billion in total fundraising. That number compares to the RMB 40.8 billion raised across 22 infrastructure REIT IPOs and secondary placements in 2025, according to data from Chinese credit rating firm CSCI Pengyuan.

Among the applications in the pipeline is a REIT sponsored by Singapore’s CapitaLand Group seeded with the Raffles City complex in Shenzhen and a mall in Mianyang, Sichuan province. 

Shanghai-based commercial developer Chongbang Group, which is backed by Singapore’s sovereign wealth fund GIC, Canada’s Ivanhoe Cambridge and Dutch pension fund manager APG, has also applied under the new rules, seeking to list the first phase of its retail-anchored Lifehub@Anting project in the city’s Jiading district. 

Shanghai-government developer Lujiazui Group has applied for a REIT seeded with Tower 1 and the retail portion of the Crystal Plaza complex in Shanghai’s Pudong district, assets the state-owned developer took full control of in 2023 by buying out Tishman Speyer’s 50 percent stake. 

Also in the pipeline are three hotel REITs sponsored by H World Group, Jinjiang International Group and Fosun Group, which would represent the first hospitality assets to enter China’s publicly listed REIT market.

Global Capital Access

China’s introduction of commercial REITs also opens the door to greater foreign participation in listed mainland property funds, according to Baker McKenzie’s Ong.

“Allowing commercial properties aligns the China REIT regime more closely with Hong Kong, which predominantly has commercial REITs. This greater alignment may facilitate connectivity between the two REIT regimes, including the long-awaited REIT Connect,” Ong said.

REIT Connect, the proposed inclusion of qualified REITs in the Stock Connect scheme linking the Shanghai, Shenzhen and Hong Kong exchanges, would give international investors access to China REIT opportunities via Hong Kong. 

Beijing approved the concept in April 2024. Hong Kong financial secretary Paul Chan said in his 2026-27 budget speech in February that the city would actively work with the mainland to progress the initiative, but no launch date has been announced and no eligibility criteria have been published.

China launched its first infrastructure REITs in 2021, initially backed by toll expressways and municipal utility assets. The scope has since broadened to cover industrial parks, data centres, affordable rental housing and consumer-facing retail assets. The country has seen 77 REITs come to market with a combined issuance scale of RMB 207 billion as of end-November, according to Cushman & Wakefield.