China's first two consumption-related REITs slide in early trade in Shanghai debut (updated)

China Jinmao Holdings

12/03/2024 02:52

(Adds comments and details)
       SHANGHAI, March 12 (Reuters) - China's first two public
real estate investment products based on commercial retail
spaces slipped in early trade after their Tuesday debut, showing
investors remain cautious towards property assets and
deflationary pressures in the economy.
    The two real estate investment trusts listed in Shanghai are
backed by shopping centres owned by developer China Jinmao
 0817.HK  and supermarkets owned by retailer Wumart. 
    Huaxia Jinmao Commercial REIT  508017.SS  edged down 0.4%
and China's Harvest Wumart Consumer REIT  508011.SS  slipped
2.2% as of 0157 GMT. 
    The launch of such REITs come after China expanded the scope
of REITs last year to commercial properties as part of efforts
to prop up a battered property sector. The REITs would allow
investor funds to flow to property owners while also giving
developers an opportunity to exit their projects.
    The commercial property arms of China Vanke  2202.HK  and
China Resources Land  1109.HK  are also among the project owners
of the first batch of approved consumption-related REITs.
    "The first batch of commercial REITs are good assets but
prices are expensive for investors, especially given the current
macroeconomic conditions," said a REITs-focused investment
manager at a brokerage firm in Shanghai.
    Shopping malls, supermarkets and other retail-focused
properties generally come under the so-called
consumption-related infrastructure projects.
    Fan Qianghua, investment director at Cypress Investment
Management Co, said the heavy pipeline of REITs supply had made
the firm cautious and they were taking a wait-and-see approach.
    After tumbling 28% in 2023, the CSI REITs Index  .CSI932006 
has climbed roughly 8% this year. 
    Another commercial REIT, backed by China Resources Land, is
set to be listed on the Shenzhen Stock Exchange on Thursday. 

 (Reporting by Shanghai Newsroom; Editing by Himani Sarkar)
 ((Li.Gu@thomsonreuters.com;))