China's REIT market could be world's largest says UBS

The Edge Singapore
The Edge Singapore 10/4/2021 10:25 AM GMT+08  • 1 min read
China's REIT market could be world's largest says UBS
UBS estimates that China's REIT market could be worth US$1.2 trillion by 2030, making it one of the world's largest
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The first nine China REITs (C-REITs) comprising all infrastructure assets were issued in the first half of this year. According to UBS, China has US$60 trillion of infrastructure assets. “If 2% of these are securitised via REITs, using our proprietary interactive model we estimate a US$1.2 trillion C-REIT market in 2030 (5% of stock market), with 4% to 8% annualised unlevered returns and low volatility,” UBS estimates. It adds that the C-REIT market could be as large as US$3 trillion by 2030, comprising 11% of the stock market.

See: Real assets are the new bonds, says JPMorgan AM

UBS reckons that C-REITs are likely to be attractive investments for domestic investors such as insurance companies because of attractive dividend yields. Additionally, banks could be potential investors if the capital charge becomes more favourable.

For more stories about where the money flows, click here for our Capital section

Global investors can access C-REITs through the Qualified Foreign Institutional Investor (QFII) Programme. “We believe [global investors’] participation in C-REITs could be significant if investing restrictions are eased,” UBS says.

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