According to a report from the China Index Academy, financing support policies for real estate enterprises continued to be accommodative in the first quarter of 2026. In practice, financing instruments have become more diverse, while the scale of bond financing remained flat compared to the previous year, with credit bonds and asset-backed securities (ABS) still serving as the primary funding channels. Leading developers, exemplified by CHINA RES LAND (01109), are leveraging their expertise in developing and operating income-generating properties to ride the wave of REITs. They are establishing multi-tiered real estate REIT platforms and enhancing capabilities across the entire commercial real estate value chain, covering fundraising, investment, development, construction, management, and exit strategies.

**Financing Scale: Unchanged from Previous Year, Credit Bonds Dominate** Total bond financing in the real estate sector from January to March 2026 amounted to 126.45 billion yuan, remaining consistent with the same period last year. By financing structure, credit bond financing reached 85.16 billion yuan, up 9.7% year-on-year; overseas bond financing totaled 10.09 billion yuan, surging 181.3% year-on-year; while ABS financing declined by 30.9% to 31.19 billion yuan. In March 2026 alone, real estate sector bond financing totaled 51.88 billion yuan, increasing 5.7% year-on-year and 48.4% month-on-month. Credit bond financing within the sector accounted for 41.23 billion yuan, rising 20.5% year-on-year and 129.6% month-on-month, representing 79.5% of the total. There was no overseas bond financing recorded. ABS financing stood at 10.65 billion yuan, down 28.4% year-on-year and 7.4% month-on-month, making up 20.5% of the total.

In terms of issuance structure, central and local state-owned enterprises were the primary issuers of credit bonds, accounting for 94% of issuance year-to-date, a 2 percentage point increase from the previous year. Issuance by private and mixed-ownership enterprises declined. Companies such as Beijing Capital Development, China Resources, and Beijing Capital Group issued bonds exceeding 5 billion yuan each. Bond issuance by private enterprises remained low, with only five private or mixed-ownership enterprises issuing bonds, fewer than the previous year. These were generally larger firms that have not yet encountered financial distress, making it difficult for the benefits to reach the majority of privately-owned enterprises facing liquidity constraints. New Hope Group and Excellence Group each issued five-year medium-term notes with relatively long tenors. A small number of companies also issued overseas bonds, primarily state-owned enterprises like Yuexiu Property and COBOC. Seazen Holdings completed a USD 355 million overseas bond issuance.

**Financing Innovation: REIT Instruments Diversify, CHINA RES LAND Builds Multi-tiered Platform** Within the ABS issuance structure, CMBS/CMBN were the largest category of asset-backed securities, accounting for 63.0% of the total. This was followed by quasi-REITs and affordable housing ABS, comprising 20.9% and 13.1% respectively, while supply chain ABS made up 2.9%. Compared to the previous year, supply chain ABS continued to decline, while the proportion of CMBS/CMBN increased steadily. In 2025, CMBS/CMBN and quasi-REITs were the main ABS issuance types, accounting for 43.7% and 31.2% respectively. The proportion of CMBS/CMBN rose rapidly, increasing its share by 12.2 percentage points. Types backed by high-quality underlying assets garnered more investor attention, with the ABS channel remaining open to companies holding premium income-generating assets.

The pilot program for commercial real estate REITs has fully commenced. On December 31, 2025, the China Securities Regulatory Commission (CSRC) issued an announcement launching the pilot, marking its official start. On January 15, 2026, the CSRC held its annual system work conference, emphasizing the need to "promote quality improvement, structural adjustment, and volume expansion in the bond market, and ensure the smooth implementation of the commercial real estate REITs pilot." Compared to consumption infrastructure REITs, commercial real estate REITs have relatively more flexible requirements for the use of net recovered funds and sponsors, demonstrating greater policy flexibility and inclusiveness. As of April 23, 17 commercial real estate REITs had entered the application process, featuring a variety of underlying asset types including mixed-use commercial complexes, office buildings (with ancillary commercial spaces and parking), retail properties (outlets, shopping malls), and hotels, with some being mixed-asset packages. Sponsor types are diverse, including property developers like Poly Development, Beijing Capital Development, and Seazen Holdings, covering central state-owned, local state-owned, and private enterprises.

Asset-backed securities for income-generating properties continued to expand. The China Railway Seventh Group Taiheli Income-Generating Property Asset-Backed Specific Plan was issued with a scale of 936 million yuan. Its unique "community, scenic area, commercial street" integrated model made it the first securitization sample of a cultural-commercial-tourism complex in China. The Yuanlian Suyuan Industrial City Income-Generating Property Asset-Backed Specific Plan was successfully issued on the Shanghai Stock Exchange with a scale of 118 million yuan. The original equity holder was the Suzhou Industrial Park Yuanlian Medicine Valley Phase I Infrastructure Investment Fund, marking the first instance in China of an industry-guiding infrastructure investment fund acting as the original equity holder.

In the public REITs sector, the range of eligible underlying asset types continued to broaden. In December 2025, the National Development and Reform Commission issued the "List of Industry Scopes for Infrastructure Real Estate Investment Trust (REIT) Projects (2025 Edition)", which included sports venue projects, multi-format integrated commercial complexes combining business, tourism, culture, sports, and health, hotel projects rated four stars and above, premium and Grade A office buildings in mega-cities and super-large cities, and urban renewal projects such as renovations of old streets and old factory areas. The continued expansion of instruments like public REITs, ABS for income-generating properties, and commercial real estate REITs lays a solid foundation for high-quality developers to revitalize existing assets and build a closed loop for asset management, development, and operation.

Leading developers, represented by CHINA RES LAND, are capitalizing on their foundation in developing and operating income-generating properties. They are leveraging the REITs trend to construct multi-tiered real estate REIT platforms and advance capability building across the entire commercial real estate value chain. In 2025, CHINA RES LAND successfully established its first Pre-REITs strategic private equity fund for commercial real estate to support the development of projects under construction, steadily improving its asset management system. Previously, the company created the asset-light management platform CR Mixc Lifestyle, and launched two public REITs—CR Consumption REIT and CR Youchao REIT—along with several quasi-REITs. CR Consumption REIT boasts a market capitalization exceeding 10 billion yuan, firmly holding the top position among consumption infrastructure REITs. CR Youchao REIT completed a fund expansion within the year, with its share price at the end of 2025 rising 50% above its IPO price. The successful operation of these two public REITs has established the company's first-mover advantage in the financialization of shopping malls and rental housing. By the end of 2025, the company's assets under management reached 502.2 billion yuan, an increase of 40.1 billion yuan from the end of 2024.

The effective construction of CHINA RES LAND's multi-tiered real estate REIT platform benefits from its prominent portfolio of operational real estate assets and strong management capabilities. In 2025, the profitability of its rental business from operational properties steadily improved. With a high gross profit margin of 71.8%, it effectively offset pressures on the development business. The business generated over 25 billion yuan in annual cash inflow, strengthening the company's cash flow position. A clear and vigorously developing second growth curve has taken shape. CHINA RES LAND holds numerous high-quality commercial assets in key first- and second-tier cities, providing a rich pipeline of targets for future REIT expansions. This facilitates a sustainable development cycle of "initial issuance and operation - optimization and enhancement - expansion and scaling," further increasing fund size and accelerating the transition towards asset management business. In the long term, grounded in its high-quality assets and efficient, high-standard development and operational capabilities, the company is promoting the formation of a major asset management closed loop. This is expected to drive an overall transformation of the company's business model and build a genuine economic moat.

**Financing Costs: Significant Decline in Funding Costs** In March 2026, the average interest rate for industry bonds was 2.56%, down 0.44 percentage points year-on-year. Influenced by factors such as interest rate cuts, changes in the structure of financing enterprises, and product mix, the average financing cost for industry bonds decreased significantly. The average interest rate for credit bonds was 2.57%, a decrease of 0.29 percentage points year-on-year. The average interest rate for ABS was 2.52%, down 0.78 percentage points year-on-year.

**Conclusion** With post-Lunar New Year demand release, the concentrated launch of high-quality projects in core cities, and intensified marketing efforts, the market has shown marginal improvement in sales since March. The recovery in the property markets of core cities like Beijing and Shanghai continued into the first half of April. Due to the base effect from the quarter-by-quarter cooling of market sentiment in 2025, the year-on-year decline in new home sales is expected to gradually narrow this year. However, the overall market remains in a bottoming-out phase, and divergent trends are likely to deepen further. The current financing environment is increasingly favoring companies with high-quality assets and robust development and operational capabilities. Whether regarding the "white list" mechanism, bond issuance, or REITs, corresponding underlying assets are essential. Therefore, for developers, focusing on improving asset quality and strengthening fundamental operational performance is the prerequisite for achieving smooth financing. Developers must also seize the recovery opportunities in core cities, actively reduce inventory, enhance the operational efficiency of held properties, and strengthen their internal cash-generating capacity. Simultaneously, they should fully utilize available policy support to stabilize cash flows.