Real estate investment trust (REITs) in the Asia-Pacific is projected to grow in both emerging and developed markets. As more investors grow to become acquainted with REITs, a number of new REIT classes have opened up, a promising move for REITs to improve in the coming years.
The majority of the REIT listings seen this year and over the past year have taken place in the emerging markets of India, Philippines, Thailand, said APREA CEO Sigrid Zialcita. This is in addition to China having announced that they have approved their pilot REIT regime.
“What we've seen in China is that they have actually been inducing a lot of the players to submit their assets for a REIT listing. In May 2021, the China Securities Regulatory Commission or CSRC, approved the registration of nine REITs, and this will essentially channel investors’ money into projects,” she said.
Zialcita said that in China, the focus of the REITs is on infrastructure projects. However, they are also seeing positive developments in fast growing markets.
APREA anticipates that the next phase of growth, when it comes to the asset class, is that it will be driven by the expansion and adoption of the REIT framework in the region's fast-growing markets – not only this year, but also into the decade.
“In the developed markets, there is also continued expansion of the REIT sector in some of places such as Hong Kong. We worked with the Securities and Futures Commission to go through the REIT code that they have and made some enhancements. There are a few companies that have lined up plans for a REIT listing in Hong Kong,” she said.
“Compared to Singapore, Japan, and Australia, there are only a few sectors in Hong Kong to get into REITs,” she added.
In emerging markets such as the Philippines, interest in REITs have picked up pace among top developers the past year.
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