China is planning to launch a public market for REITs, which will be used to funnel private capital into infrastructure projects, according to Reuters. These will be the country’s first publicly sold REITs. In the past China has only allowed privately sold quasi-REITs in the real estate sector.
The move is designed to ease the burden of infrastructure investments on debt-laden local governments. Infrastructure projects will include warehouses, toll ways, airports, public utilities and industrial parks.
“The REITs market can help reboot China’s economy, which is under downward pressure amid the virus epidemic,” explained Zhang Zheng, professor at Guanghua School of Management, Peking University, in a correspondence with Reuters.
He added, “It’s imperative to reform the way Chinese infrastructure projects are financed.”
