How exactly can the hotel assets held by these "cross-sector landlords" be revitalized?

This article is from the WeChat public account "Space Insider", authored by Wu Shuang, and published with authorization from 36Kr.

Why would an enterprise focused on biomedical business package InterContinental and Holiday Inn hotels into REITs? This may sound like a "cross-sector move", but Changchun High-Tech did not start the hotel business out of the blue. Instead, it became a "cross-sector landlord" of hotels in the process of real estate development and complex construction. Now, as its core business faces pressure and the demand for revitalizing existing assets rises, these hotels that were previously recorded on the balance sheet have begun to look for new outlets. Can REITs become a new exit for these "cross-sector landlords"?

Changchun High-Tech's Dual-Brand Hotel REITs Worth 1.194 Billion Yuan

Recently, Changchun High-Tech issued an announcement, stating that it plans to launch the application and issuance of a special asset support plan for held-for-operation real estate, namely inter-institutional REITs. The project is tentatively named "Ping An Securities - Changchun High-Tech Held-for-Operation Real Estate Special Asset Support Plan", with a planned issuance scale of 1.194 billion yuan, which is scheduled to be listed on the Shenzhen Stock Exchange and targeted at professional institutional investors.

It is worth noting that the two hotels are the assets this listed company with biomedical as its core business has put forward for REITs. The underlying assets are the house ownership and corresponding state-owned construction land use rights held by Changchun Hairong Hotel Co., Ltd., a wholly-owned subsidiary of Changchun High-Tech, specifically including Changchun High-Tech InterContinental Hotel, Changchun High-Tech Holiday Inn, and 438 parking spaces in the underground parking lot.

More notably, the two hotels are very new: Changchun High-Tech InterContinental Hotel opened on July 2, 2025, with a total of 250 rooms; Changchun High-Tech Holiday Inn opened on June 28, 2025, with a total of 373 rooms. The two hotels have a total of 623 rooms and 438 underground parking spaces. The two hotels belong to the same twin-tower building complex, located at Changchun High-Tech Haiyin Plaza, close to the core business and education area of Changchun High-Tech Zone, and their interior design is completed by CCD.

In terms of property conditions, the two assets are in excellent geographical locations. In terms of hotel brands, InterContinental and Holiday Inn both have high market recognition. So why does Changchun High-Tech plan to "package the hotels into the capital market" just one year after their opening?

According to Changchun High-Tech's preliminary plan, the special plan adopts an off-balance-sheet structure, and 100% equity of the project company will be transferred through public listing, with the manager of the special plan participating in the bidding. The first phase has a duration of about 33 years, with a priority acquisition mechanism and an open exit mechanism set every three years. Changchun High-Tech and related parties initially hold no more than 30% of the shares of the special plan, and will continue to undertake the overall operation and management functions.

In simple terms, the ownership of the hotel property can be separated from the listed company, but the operation will not be transferred together. Changchun High-Tech will continue to be responsible for overall operation, its hotel management subsidiary will take charge of specific operation, and an operation performance bet mechanism is also set. This is not a simple "hotel sale", but an attempt to let capital hold the property and professional teams run the hotel, so that the original asset holder can obtain funds and the option to re-acquire the assets in the future.

Changchun High-Tech explained that this application is a response to the pilot policy of commercial real estate REITs, aiming to revitalize high-quality existing assets, broaden financing channels, optimize financing structure, enhance the overall fund management capability, and further explore the path of revitalizing existing assets and subsequent capital operation.

However, if we put this asset operation into the business context of Changchun High-Tech, its significance may go far beyond "revitalizing assets". Financial reports show that in the first half of 2026, Changchun High-Tech achieved an operating revenue of 5.543 billion yuan, a year-on-year decrease of 16.06%; the net profit attributable to shareholders was 475 million yuan, a year-on-year decrease of 51.64%. Among them, the core subsidiary Jinsai Pharmaceutical achieved a revenue of 4.5 billion yuan, a year-on-year decrease of 17.65%, and the net profit attributable to shareholders was 578 million yuan, a year-on-year decrease of 47.84%.

At the same time, the standalone statement revenue of the company's high-tech real estate segment reached 1.391 billion yuan, a year-on-year increase of 202%, of which about 1.042 billion yuan came from internal restructuring of hotel-related assets. Excluding this factor, the real estate revenue is about 300 million yuan. From this perspective, Changchun High-Tech's promotion of hotel REITs this time may be intended to convert the non-core assets settled on the balance sheet into more liquid capital.

Why Are Listed Companies Keen on "Running Hotels Incidentally"

Why would a biomedical enterprise get into the hotel business? In fact, the opposite is true: Changchun High-Tech did not enter the hotel industry to operate hotels, but became a hotel "landlord" in the process of real estate development.

In 2019, High-Tech Real Estate, a subsidiary of Changchun High-Tech, promoted the old city reconstruction project of Kangda Plot, with a planned floor area of more than 1.3 million square meters, covering residential buildings, office buildings, star hotels, community commerce, education and other formats. InterContinental and Holiday Inn are part of this complex. Although Changchun High-Tech has a real estate subsidiary, its business is more focused on office buildings, townhouses and other projects. Hotels have never been its core business, but only a supporting facility in real estate projects.

This kind of "incidental layout" is not unique to Changchun High-Tech. Over the past decade, many listed companies have become hotel landlords in different ways. Some are left over from real estate development, some are obtained from asset acquisition, and some are actively invested and constructed. Similar cases can be found in industries such as pharmaceuticals, agriculture and animal husbandry, chemical industry, and papermaking.

For example, Jinhua Pharmaceutical, another pharmaceutical enterprise, passively received Howard Johnson Jinhua International Hotel in 2006 due to the major shareholder's occupation of funds. After taking over, the company once expected the hotel to become a second growth curve, and planned to rely on the resources of the pharmaceutical industry to host academic exchanges. However, the industrial resources did not translate into enough hotel customer flow, and the project suffered losses for many consecutive years, with a cumulative loss of more than 336 million yuan. Finally, it had to be divested through judicial auction.

The same is true for Chenming Paper. In 2005, the company established Shandong Yujing Hotel Co., Ltd. in joint venture with Hong Kong Kangfa Development to operate Chenming International Hotel. As part of the group's diversified layout, this hotel was once expected to improve business supporting facilities. But now, this asset has become a typical non-core business burden. From 2023 to 2025, the hotel suffered losses for three consecutive years, with net profits of -25.954 million yuan, -16.2782 million yuan and -19.5295 million yuan respectively. In the first quarter of 2026, it continued to lose 4.5575 million yuan. Finally, under the pressure of its core business, Chenming Paper had to package 90.05% equity of the hotel and about 200 million yuan of creditor's rights, and transfer them to Shouguang Cultural Tourism Investment and Development Group for about 317 million yuan.

Jinpu Titanium Industry also planned to sell 100% equity of Shanghai Dongyi Hotel Management Co., Ltd. in 2024. The reason stated in the announcement is also straightforward, that is, "to further focus on the core business, optimize the asset structure, and accelerate the return of funds". For Jinpu Titanium Industry, the hotel has changed from a layout to a non-core asset that needs to be disposed of.

Putting these cases together, these "cross-sector landlords" entered the hotel industry through roughly several paths. The first is real estate supporting facilities: complexes need hotels, industrial parks need hotels, and new urban districts need hotels, so enterprises build hotels incidentally. The second is industrial synergy: for example, pharmaceutical enterprises hold academic conferences, and hotels are ideal carriers. The third is local cooperation: enterprises improve local industry and urban supporting facilities through hotels, cultural tourism projects and other forms, in exchange for deeper cooperation with local governments. The fourth is asset takeover: after debt repayment, acquisition and asset replacement, hotels are included in the enterprise's balance sheet, and the enterprise becomes a hotel landlord for no obvious reason.

All in all, hotels are just assets left behind in different ways outside the main business of these enterprises. They do not take hotel operation as their core business, but have become a special group of landlords in China's hotel market. Their logic has never been "I want to become an excellent hotel management company", but "this project needs a hotel, so we need to own a hotel".

In the past, this logic was supported by asset appreciation and project supporting facilities. But when the real estate industry enters the stock era, listed companies are paying more and more attention to cash flow and asset returns, and hotels can no longer hide behind the complex. They must finally answer a separate question: can this asset make profits on its own? This may be the reason why more and more "cross-sector landlords" begin to re-examine their hotel assets today.

With the Arrival of REITs, Do "Cross-Sector Landlords" Have New Exits?

Since the beginning of this year, news about hotel REITs has increased significantly. The latest data from JLL shows that in the first half of 2026, the transaction value of hotel investment in Chinese mainland exceeded 9.9 billion yuan (about 1.5 billion US dollars), a year-on-year increase of 155.4%, making it one of the markets with the largest growth rate in the Asia-Pacific region. Cushman & Wakefield also judges that 2026 will be the first year of development for China's commercial real estate REITs.

With the expansion of commercial real estate REITs, two securitization channels for hotel assets are quietly taking shape. One is public offering REITs, such as Huatai Zijin Huazhu Anzhu Commercial REIT. The other is inter-institutional REITs, including the 1.194 billion yuan special plan applied by Changchun High-Tech this time, and the previously planned 2.151 billion yuan project of Yuanzhou Group. In short, public offering REITs are issued in the public market for public investors to participate; inter-institutional REITs are mainly targeted at professional institutional investors, which are closer to asset securitization transactions between enterprises and institutions. For "cross-sector landlords" eager to revitalize non-core assets, the latter has relatively larger operating space.

The question arises: can those enterprises that are not good at hotel operation but hold hotel assets for various reasons also revitalize their assets through REITs?

Logically, the answer is yes. In the past, the only ways for enterprises to dispose of hotel assets were selling, transferring, or continuing to hold them. If they continue to operate, they need to make up for the lack of hotel operation capabilities; if they sell directly, they need to find suitable buyers; if they hold for a long time, it means that funds are continuously settled, and even they have to bear continuous operating losses.

REITs provide a different path. It no longer requires enterprises to find traditional "buyers", but converts qualified properties into standardized financial products, with investors undertaking the asset returns, so that enterprises can reduce the pressure of holding heavy assets, and the hotels can still continue to operate.

Changchun High-Tech's application is a typical case. According to the preliminary plan, 100% equity of the project company will be transferred to the special plan. Changchun High-Tech and related parties initially hold no more than 30% of the shares, and will continue to participate in the operation, with priority acquisition and open exit mechanisms set. The hotel remains the same, only the landlord has changed.

But REITs are not a simple "hotel sale", but provide a new asset exit channel. For a large number of enterprises whose core business is not hotel operation, what they really want to get rid of may not be the hotel itself, but the long-term heavy asset that occupies funds and generates depreciation, while they lack sufficient operation capabilities. REITs just provide the possibility to separate asset ownership from hotel operation.

Of course, not all "cross-sector landlords" can take this path. At the end of 2025, the pilot of commercial real estate REITs was officially launched, and hotels were clearly included in the scope of support. Core location, mature operation and stable cash flow have become the key indicators for hotel assets to be securitized.

This is why Hua'an Jinjiang and Huazhu Anzhu can enter public offering REITs. Their real advantage is not just the two brands of "Jinjiang" and "Huazhu", but also the fact that the underlying hotel assets have been in operation for many years, with relatively stable operating data, mature brand system and properties in high-quality locations. Even so, it is not easy for mature hotels to be issued after applying for REITs, let alone those cross-sector hotels that have suffered long-term losses, are in average locations, have old properties and unstable cash flow.

Therefore, for enterprises that own hotel assets, if the property location, asset conditions, brand operation and future cash flow can meet the requirements of regulators and investors, REITs can indeed become a "burden reduction tool". But for hotels with long-term losses and insufficient operation capabilities, REITs may not be a lifesaver.

From the perspective of the hotel industry, what is really worth paying attention to may not be how many hotels can enter REITs, but whether the opening of this channel will prompt more non-professional landlords to re-examine their hotel assets and transfer the properties to more professional capital and operation systems.

Apart from REITs, Where Else Can These Hotels Go?

REITs provide a new exit, but it is obviously not the only one. For those "cross-sector landlords" who are not professional hotel operators but hold hotel properties, the real problem to be solved is not "whether to run a hotel", but how to make their assets generate value again. Combined with the current project cooperation and asset revitalization cases in the accommodation industry, three paths can be roughly seen.

The first is to hand over the operation to professional operation institutions. For many cross-sector enterprises, the problem may not lie in the property, but in the lack of hotel operation capabilities. Cooperating with professional hotel groups and management companies may be more effective than forming a new team on their own. The owner continues to hold the property, and professional institutions are responsible for the brand, product, marketing and operation. The owner will change from a "hotel operator" to a pure asset holder.

This division mode of "asset belongs to the asset side, operation belongs to the operation side" is emerging. For example, Ascott China cooperates with Guangzhou Chengtou to expand serviced apartments, long-term rental apartments and senior care apartments. Huazhu also cooperates with Guangzhou state-owned assets to include existing asset revitalization, hotel management and asset securitization into the scope of cooperation. For property owners, as long as professional operation can improve the occupancy rate, average daily rate and operating profit, the asset value of the hotel will also increase accordingly, and they will have more options whether to continue holding, sell or enter REITs in the future.

The second is not to stick to the "hotel" format, and try other formats according to the property conditions. Many "cross-sector landlords" actually own a good property, not an excellent hotel. In that case, there is no need to adhere to the traditional hotel mode. Combining hotels with serviced apartments, long-term rental, office space and even elderly care can be a way to revitalize the property again.

This kind of mixed format has also been verified by the capital market. For example, the Shenzhen Ascott Raffles City Serviced Apartment, one of the underlying assets of China Capital Kaide Commercial REIT, adopts the business model combining long-term and short-term rental. With the continuous expansion of commercial real estate REITs, models such as hotels combined with serviced apartments, and the integration of long-term and short-term rental are receiving more and more attention. For some projects that have difficulties in operating traditional hotels but have good property conditions, this may also be a path worth trying.

The third is to sell the assets to people who really understand them to release value as soon as possible. It is undeniable that some hotel assets are in average locations, have suffered losses for many years, have aging properties, and lack sufficient surrounding demand, so it is difficult to improve their performance no matter how they are renovated. In this case, instead of insisting on the "second growth curve" story, it is better to admit that the hotel may not be a good business at all. Especially when the enterprise lacks operation capabilities for a long time, the opportunity cost of continuing to hold the assets is likely to be higher than the loss caused by the sale. Chenming Paper's final transfer of the hotel to the local cultural tourism group is a typical case of asset clearance.