The European Public Real Estate Association (EPRA), together with its associate organisations in North America (NAREIT) and Asia (APREA), has signed a memorandum of understanding with the newly formed China REITs Alliance (C-REITs) aimed at promoting the most efficient and successful property investment vehicle in the world’s second-largest economy.

The European Public Real Estate Association (EPRA), together with its associate organisations in North America (NAREIT) and Asia (APREA), has signed a memorandum of understanding with the newly formed China REITs Alliance (C-REITs) aimed at promoting the most efficient and successful property investment vehicle in the world’s second-largest economy.

The three listed real estate industry bodies were invited to present at the Chinese association’s inaugural ceremony in Beijing on December 13. The agreement commits them to supporting C-REITs through regular information exchange and cooperation on investor outreach and networking activities.

C-REITs is co-sponsored by the China Real Estate Chamber of Commerce (CRECC) and the Tsinghua Alumni Association of Real Estate.

'The Chinese government has strongly backed the establishment of C-REITs, and this is a milestone in the development of the global REIT industry which EPRA will fully support from our Asia representative office in Hong Kong,' said Philip Charls, CEO of EPRA. 'Not only will this boost the growth of the listed sector in one of the world’s largest real estate markets, it will also raise the understanding of the great advantages REIT structures have for Chinese investors seeking property assets in Europe, the Americas
and the rest of Asia.'

Analysts estimate that a Chinese REIT market has the potential to grow by as much as a factor of ten over the next decade, with the current listed real estate sector having a market capitalisation of about $500 bn. This compares with a total global market cap of $1.78 trl for the EPRA/FTSE/NAREIT developed, emerging and AIM listed real estate indices.

Fred Wang, secretary-general of C-REITs, said: 'The introduction of REITs will be a break-through event for China, providing the general public with a simple and transparent way to invest in the largest and highest quality commercial properties. As REITs are new to China, the underlying legal and tax structures are still to be drafted and C-REITs would like to work closely with its partner international organisations and local bodies such as the China Real Estate Chamber of Commerce and the Asset Management Association to develop the most efficient investment vehicle possible.'

Wang said it is also crucial to unite Chinese developers, financial institutions and intermediaries behind
the promotion of REITs to government authorities, such as the China Securities Regulatory Commission and the People's Bank of China, to ensure the incubation of a successful C-REITs market.