China Property Trusts Fuel Hong Kong Pipe Dreams
Listing these investment vehicles on mainland stock exchanges could lift counterparts in the city through their joint trading channels.
A $5 trillion idea whose time has come.
Photographer: HECTOR RETAMAL/AFP/Getty Images
After several false starts, China is finally moving to roll out real estate investment trusts. Stock-market listings for income-producing pools of property assets are likely to get a warm reception from yield-chasing mainland investors. The development may also bring significant benefits for Hong Kong-listed REITs and the city’s stock exchange.
There’s currently only one such trust listed in mainland China. Issued by developer China Vanke Co. and Penghua Fund Management Co. in 2015, this collective investment vehicle owns a single office complex in Shenzhen’s Qianhai free-trade zone. While the closed-end fund employs a quasi-REIT structure, it differs in lacking a diverse portfolio or ownership rights for the underlying assets, which in other markets are usually held by trustees on behalf of investors.