HONG KONG SAR - Media OutReach - 15 June 2021 - Cushman & Wakefield, a leading global real estate services firm, released the 2020 Asia REIT Market Report today at the 9^th China Real Estate Finance Forum, in conjunction with the China Real Estate Association (CREA). The report presents a REITs market overview for major Asia countries and regions, together with an analysis of properties in mainland China, and the market for securitization of real estate assets in China. For the first time, the report also includes a special study of the infrastructure REITs markets in the U.S., Singapore and India; and offers a detailed case analysis of Mapletree Logistics Trust – thus providing a reference for China to draw on in its ongoing development of a public offering-based REITs market.

REITs in Japan, Singapore, Hong Kong SAR and India are the focus of the Asia market

As at the end of 2020, there were 185 REITs in the Asia market with a total market value of US$281.4 billion, down around 5% year-on-year. Regulators and REITs managers actively responded to the impact of the COVID-19 pandemic via a range of measures, providing multi-level supporting initiatives for REITs to maintain resilience in the wake of the pandemic.

• There were 62 REITs in Japan, with a total market value of approximately US$139.4 billion. Although the market value contracted by 9% compared with 2019, Japan still accounted for more than half of the Asia REITs market, making it the largest REITs market in Asia and the second largest globally.
• The Singapore REITs market was active in 2020. Driven by regulatory policies, consolidation and merger activities were prevalent and transaction liquidity improved. By the end of 2020, there were 42 REITs in Singapore, with a total market value of around US$81.4 billion and a dividend yield of 6.4%.The REITs market in Hong Kong SAR faced challenges and also embraced reforms in 2020. Total REITs' stock prices dropped by 11% overall, depressed both by the impact of COVID-19 and an environment of lingering social unrest. The average dividend yield was 6.3%; the average gearing ratio was 28% which is lower than those in Singapore and Japan.
• India's REITs market saw two office property REITs issued in 2020 and early 2021, along with two infrastructure INVITs, namely, IRB and Indigrid, engaging in roads and power networks, respectively.

The real estate securitization market in mainland China continues to expand rapidly

This report focuses on an analysis of changes and highlights in REITs, CMBS and CMBN products in the mainland China market in 2020, and summarizes the disposal of products that expired prior to the end of 2020:

• In 2020, 90 products were issued, totaling RMB179.86 billion, up 8.4% and 13.1% respectively over the previous year in terms of number and value.
• Two infrastructure REITs were issued in 2020, providing an innovative model for the financing model in domestic infrastructure industry.
• By the end of 2020, 32 products had successfully exited. The disposal of R&F Guangzhou International Airport - Integrated Logistics Park CMBS, and Beijing Huayuan Yingdu commercial REITs, attracted extensive attention from the industry.

The 2020 Asia REITs Research Report also robustly analyzes the market performance of infrastructure REITs listed in the U.S., Singapore and India. Chris Yang, Director, Valuation & Advisory Services, Beijing and Leader of Asset Securitization Business Line at Cushman & Wakefield, said: "The 2020 report analyzes the infrastructure REITs in detail, including AMT and Corenergy in the U.S., Hutchison Port Trust in Singapore, and IRB Invit in India, aiming to explore the development of overseas infrastructure REITs and present a more usable outlook and forecast for China's public offering-based REITs"

Cushman & Wakefield has been involved in over 100 real estate securitization projects

As one of the professional firms earliest engaged in the practice and research of REITs in China, Cushman & Wakefield has been actively participating in the development of China's real estate securitization. By May 2021, it had completed due diligence and valuation work for 113 issued REITs, CMBS and CMBN projects, with a combined value exceeding RMB270 billion. Representative projects include Cainiao Network Logistics, the first expandable REIT in China; Poly multifamily, China's first shelf offering renting house REIT; Shenzhen Anju Group's Talent Apartment, the first talent apartment REIT in China; and Suning Yunxin, the first REIT allowed for subsequent issuance in China.

Public offering infrastructure REITs to arrive in the China market soon

Recently, nine public offered infrastructure REITs products gained official registration permission from the China Securities Regulatory Commission and have entered the sale stage. This development was one of the focus of discussion among participants at the China Real Estate Finance Forum. Feng Hu, Senior Director, Head of Valuation & Advisory Services, North China, Cushman & Wakefield, said, "As the nine public offered infrastructure REITs pilot projects entered the sale stage, the long-expected REITs market in China finally drew back the curtain. Cushman & Wakefield was excited to be involved in the due diligence and valuation work of five of these projects. The underlying assets include logistics warehousing, industrial parks, waste disposal and power generation facilities. Cushman & Wakefield supports the sustainable and healthy growth of the public offered infrastructure REITs with its experience and professional services.

Hong Kong REITs Market

In Hong Kong, to enhance the competitiveness of the city's REITs market and promote its long-term development, while safeguarding the interests of investors, the SFC announced and implemented a revised Code on Real Estate Investment Trusts (REITs) in December last year.

The proposed amendments include:

(i) allowing REITs to make minority-interest investments in properties (Minority-owned Properties) subject to various conditions;

(ii) allowing REITs to make investments in property development projects in excess of the existing limit of 10% of gross asset value (GAV) subject to unitholders' approval and other conditions;

(iii) increasing the borrowing limit for REITs from 45% to 50% of GAV;

(iv) broadly aligning the requirements for REITs' connected party transactions and notifiable transactions with the requirements for listed companies, in line with existing policy and practices.

The Chief Executive has also stated in the latest policy address that the government would strive to promote Real Estate Investment Trust (REITs) in Hong Kong to develop Hong Kong into a vibrant REIT market in Asia. LINK REIT (00823) as the largest REIT in Asia in terms of market capitalization, has actively developed into a global real estate investment and management institution through the acquisition of multiple domestic and overseas properties and the right of ownership in recent years. The company has assets spread in Hong Kong, Beijing, Shanghai, Guangzhou, Shenzhen, London and Sydney. It plans to explore business growth opportunities in various markets continuously.

A couple of REITs are launched by reputable companies lately in the Hong Kong's REITs market, including China Merchants Commercial REIT (01503) and SF REIT (02191), which were listed in December 2019 and May 2021 respectively. Other REITs are also reported to be preparing for listing in the market.

Mr. Andrew Chan, Cushman & Wakefield's Managing Director, Valuation and Advisory Services, Greater China, commented, "REITs are an important asset class in the capital market. With the implementation of the newly revised Code on Real Estate Investment Trusts (REITs), the amendments will allow Hong Kong REITs with greater investment flexibility. Coupled with the listing of China's Infrastructure REITs, we believe that there will be more positive and comprehensive development in the Hong Kong and China's REITs market.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and 60 countries. Across Greater China, 22 offices are servicing the local market. The company won four of the top awards in the Euromoney Survey 2017, 2018 and 2020 in the categories of Overall, Agency Letting/Sales, Valuation and Research in China. In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.hk or follow us on LinkedIn (

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