The secondary market for public REITs has extended its downward trend for a third consecutive week. As of last Friday (July 24), the CSI REITs (closing) index closed at 710.62 points, down 2.34% week-on-week, while the CSI REITs total return index closed at 949.20 points, a decline of 2.15%.

According to Wind data, among the 86 listed public REIT products, the number of those with weekly gains decreased to 13. The top three gainers last week were the Huaxia Zhonghai Commercial REIT, Huatai Jiangsu Jiaokong REIT, and CICC China Green Development Consumer REIT, with weekly increases of 4.18%, 2.98%, and 2.51%, respectively. Conversely, the number of products declining week-on-week increased to 73. The three biggest losers were the CICC Yizhuang Industrial Park REIT, Huatai Nanjing Jianye REIT, and Bosera Tiankai Industrial Park REIT, all experiencing weekly drops exceeding 10%.

Q2 Earnings Report Review

Last week saw the conclusion of public fund Q2 earnings report disclosures. Statistics from CITIC Securities show that as of July 22, 81 listed REITs had released their Q2 reports. Among them, 16 newly launched projects achieved an average overall achievement rate exceeding 100% for revenue, EBITDA, and distributable amounts. For the 65 existing projects, the three indicators averaged year-on-year growth of 3.0%, 1.7%, and 2.0%, respectively. Rental housing and consumption sectors performed steadily, while industrial parks and warehousing and logistics continued to face pressure.

Market Performance and Sector Breakdown

Data from Kaiyuan Securities indicates that last week, the weekly performance of REITs in different sectors was as follows: affordable housing REITs fell 1.37%, environmental protection REITs fell 1.79%, highway REITs fell 2.87%, industrial park REITs fell 5.22%, warehousing and logistics REITs fell 4.51%, energy REITs fell 2.8%, and consumer REITs fell 0.35%. The industrial park and warehousing and logistics sectors experienced the most significant declines.

Regarding individual products, the top three gainers among the 86 listed REITs were the Huaxia Zhonghai Commercial REIT, Huatai Jiangsu Jiaokong REIT, and CICC China Green Development Consumer REIT, with weekly increases of 4.18%, 2.98%, and 2.51%. The three biggest losers last week were the CICC Yizhuang Industrial Park REIT, Huatai Nanjing Jianye REIT, and Bosera Tiankai Industrial Park REIT, with weekly declines of 11.04%, 10.71%, and 10.33%, respectively.

Trading Volume and Fund Flows

In terms of trading volume and turnover rate, Everbright Securities data shows that the total trading volume of public REITs last week was 21.8 billion yuan. The average daily turnover rate for new infrastructure REITs led other sectors. The market saw a net inflow of 44.46 million yuan from main funds, reflecting a slight increase in trading enthusiasm compared to the previous week. By underlying asset type, the top three sectors for net fund inflows were warehousing and logistics, affordable rental housing, and new infrastructure. For individual REITs, the top three for net fund inflows were the Nanfang Runze Technology Data Center REIT, ChinaAMC Huarun Youchao REIT, and Harvest Jiuzhoutong Pharmaceutical REIT.

Industry Developments and Policy Updates

Several significant industry developments occurred last week. With the completion of Q2 earnings report disclosures, the performance of public REITs became apparent. According to Shenwan Hongyuan Securities, a sample of REITs with two consecutive years of comparable data showed that overall Q2 revenue fell 4.6% year-on-year and 10.3% quarter-on-quarter. Net profit declined 30.8% year-on-year and 31.1% quarter-on-quarter, while distributable amounts fell 6.6% year-on-year and 6.0% quarter-on-quarter. The average distribution rates for property rights REITs and concession REITs were 4.67% and 9.06%, respectively. The ranking of distributable amount growth (excluding expansion) was: affordable housing (+3.3%) > consumption (-1.1%) > environmental water utilities (-4.0%) > transportation (-4.7%) > warehousing and logistics (-8.5%) > industrial parks (-16.8%) > energy (-18.8%).

By sector, affordable housing REITs saw revenue and distributable amounts increase by 1.4% and 3.3% year-on-year, respectively, with stable occupancy and rental rates. The consumer sector showed year-on-year growth in revenue and EBITDA, but a slight 1.1% decline in distributable amounts, with rental income rising but occupancy rates diverging. Environmental water utilities revenue grew 5.0% year-on-year, while EBITDA and distributable amounts fell 3.3% and 4.0%, respectively. The transportation sector saw revenue remain largely flat, with distributable amounts down 4.7% year-on-year, as most projects reported lower traffic and toll revenue, though Zhaoshang Expressway, Jiangsu Jiaokong, and China Communications Construction performed relatively better. The energy sector experienced a roughly 20% year-on-year decline in revenue, EBITDA, and distributable amounts, primarily due to weaker wind and water conditions, power curtailment, and declining market electricity prices.

On July 24, CapitaLand Investment launched the CICC CapitaLand Commercial Holding Property Asset-Backed Special Plan, which was successfully established with an issuance size of 31.5 billion yuan. This is currently the largest inter-institutional REIT transaction involving a foreign institution in the market. Following the listing of the ChinaAMC CapitaLand Consumer REIT in September 2025 and the approval of the ChinaAMC CapitaLand Commercial REIT in June this year, the 'CapitaLand Select' initiative marks another milestone for CapitaLand Investment's participation in China's multi-tiered REIT system, further enhancing the capital recycling path that runs parallel to public and private offerings. The underlying asset of the 'CapitaLand Select' plan is the CapitaLand Jingcui Plaza, a flagship mixed-use complex in Shanghai's Xintiandi area, with a total leasable area exceeding 130,000 square meters.

On the policy front, on July 22, the Zhuzhou State-owned Assets Supervision and Administration Commission issued its 2026 work plan, requiring state-owned enterprises to complete at least one key project involving asset securitization or public REITs. On July 23, the Beijing Development and Reform Commission held a conference on key project financing for the second half of 2026, proposing the active use of financial tools such as infrastructure REITs to guide long-term capital into urban renewal. On July 24, the Shanghai and Shenzhen Stock Exchanges revised and released updated guidelines for asset-backed securities, adding new norms for real estate underlying assets and specific requirements for inter-institutional REITs.