The recent listing of Hong Kong's first real estate
investment trust (Reit) made up entirely of mainland Chinese
properties heralds a ground-breaking step in the development of
the nascent Reit markets on both sides of the border.
For Hong Kong, the deal has helped an emerging asset class
in the territory to evolve. Impressively, it was launched less
than a month after the long-awaited Link Reit – which
packaged only local assets – tested local appetite for
this new product for the first time.
In China, despite a rapidly urbanizing population, in turn
making property a potentially attractive investment, challenges
such as high taxes, close scrutiny over repatriating profits
and unclear ownership structures have discouraged some foreign
investors from buying physical real estate assets. At the same
time, moves by Beijing to cool the sector by clamping down on
property-related lending have fuelled interest by developers in
finding new ways to raise...