Cushman & Wakefield: There is still potential in the real estate market. The expansion of REITs ushers in a new stage of real estate financialization.
On January 12th, at the 2025 year - end press conference of DTZ Beijing Company, Hu Feng, the Managing Director of the North China Region of DTZ, stated that the Chinese real estate market still has huge untapped potential. From a macro perspective, compared internationally, among the top ten economies in the world, except for developing countries such as China, India, and Brazil where the real estate added - value accounts for less than 10% of GDP, in other regions, it exceeds 10%. In the United States, the real estate added - value accounts for 12.2% of GDP, while in China, it is 6.3%. This indicates that the direct contribution of China's real estate to the economy is not high but rather at a relatively low level internationally.
Looking at the future direction of the market, the expansion of the pilot scope of public REITs for infrastructure to office buildings and hotel assets marks that China's real estate financialization process has entered a new stage. This major policy breakthrough not only provides a standardized and market - oriented exit channel for the revitalization of existing assets and expands more in - depth and diverse allocation options for institutional investors but also injects strong impetus into the value reconstruction and operation improvement of the commercial office and hotel markets.
According to the statistics of DTZ, in terms of the composition structure of the added - value of the real estate industries in China and the United States, the real estate added - value in the United States reaches 3.5 trillion US dollars, of which real estate leasing accounts for about 77%. The market scale of commissions for residential and commercial leasing is 300 billion US dollars, and the commercial commission is about 48 billion US dollars. In China, the real estate added - value is 1.2 trillion US dollars, of which real estate development and operation account for more than 50%, property management accounts for 15%, owner - occupied housing accounts for 29%, and real estate agencies account for 6%. Against this background, the market is accelerating its shift from a model solely relying on development and sales to competition based on full - cycle capabilities of "investment, financing, management, and exit", and the real estate market still has great room for development.
At the policy level, on December 31, 2025, the China Securities Regulatory Commission issued the "Announcement on Launching the Pilot Program of Commercial Real Estate Investment Trusts", officially including commercial real estate such as office buildings and hotels in the pilot scope of public REITs. The supporting notice issued simultaneously clearly promotes the expansion of the REITs market, establishes a "1 + 3+N" institutional system, and significantly improves the review efficiency, shortening the time from acceptance to the first feedback from 30 working days to 20 working days. The Shanghai Stock Exchange also revised its business rules synchronously, improving the full - process regulations for the listing review, issuance, and trading of commercial real estate REITs, further optimizing the follow - on offering mechanism, and shortening the follow - on offering interval to 6 months. A series of policy measures provide a standardized and market - oriented exit channel for the revitalization of existing assets and expand more in - depth and diverse allocation options for institutional investors.
From the perspective of market issuance, China's public REITs market has entered a stage of large - scale development. As of the end of 2025, the total number of products issued in the domestic public REITs market reached 79, and the total issuance scale (including follow - on offerings) exceeded 210 billion yuan. Among them, 20 new products were issued and 5 follow - on offerings were made in 2025, with a total fundraising scale of 47.335 billion yuan. The market scale ranks first in Asia and second in the world. It is worth noting that commercial REITs have performed outstandingly. The Huaxia CNOOC Commercial REIT once set a record of 320 - fold over - subscription, fully demonstrating the market's recognition of commercial real estate REITs. At the beginning of 2026, the secondary market of public REITs even achieved a "four - consecutive - day rise" good start, with sectors such as data centers and industrial parks leading the rise. The CSI REITs Index rose 1.86% month - on - month, and market activity continued to increase.
DTZ released the sixth issue of the "Research Report on the Real Estate Capitalization Rate of China's REITs Index". Zhang Kailing, the Assistant Director of the Valuation and Advisory Services Department of DTZ Beijing and the Director of the REITs Research Center, said that the capitalization rate, as the core pricing anchor for real estate, directly reflects industry confidence and investment logic. As public REITs are officially extended to the office building and hotel sectors, this report will help the industry anchor its development direction by tracking the changes in the capitalization rates of core business forms, assist in the value discovery of commercial real estate, and further improve the multi - level value system of the REITs market.
Regarding the market trend in 2026, Wei Dong, the Chief Policy Analysis Expert in the North China Region and the Head of the Research Department in the North China Region of DTZ, pointed out that 2026 is the first year of the 15th Five - Year Plan. Economic development will still be mainly based on stability. The "cross - cycle adjustment" proposed at the Political Bureau meeting on economic work will take into account both the solution of current problems and long - term development planning. Expanding domestic demand and boosting consumption remain the core means to drive economic growth.
For the Beijing regional market, Deng Shanshan, the Head of the Project and Corporate Services Department in the North China Region of DTZ, emphasized after reviewing the performance of the Beijing office building market in 2025 that the market will still face multiple challenges in 2026. Improving core competitiveness and achieving market breakthroughs are important issues that property owners need to face directly. Meng Yi, the Head of the Commercial Department in the North China Region, proposed an innovative path for the commercial business form from a "long - termism" perspective. She introduced that in 2025, 1.1 million square meters of high - quality space was newly added to the Beijing retail market, and the renovation and upgrading of old projects achieved remarkable results. The market shows three characteristics: the transformation of commercial space into an "urban living room", the matrix operation of IPs, and the long - term capital concept. In the future, empowering commerce with culture and breaking through bottlenecks through scenario innovation will become the key to the resilient growth of the commercial market.