Falling rents and stalled expansion fundraising: Hidden worries of Chengtou Kuantang Affordable Rental Housing REIT have surfaced.

The Chengtou Kuanting Affordable Rental Housing REIT, once regarded as a "top performer", has shown signs of pressure in the first half of this year.

From the fund level, the data remains impressive: in the first half of the year, the fund recorded revenue of 91.6745 million yuan, net profit of about 42.0492 million yuan, EBITDA of 65.565 million yuan, and net operating cash flow of about 53.24 million yuan, with its book performance still looking solid.

However, from the perspective of project operation, the mid-year report tells a different story: the occupancy rate was maintained through "trading price for volume", while the unit rental price kept declining; the Jiangwan Community is recovering, but the Guanghua Community is losing blood.

At the same time, the additional issuance, which was expected to become the "second growth curve", still remains at the due diligence stage announced a year ago.

Overall, the book performance of Chengtou Kuanting Affordable Rental Housing REIT in the first half of the year is still decent, but the hidden worries at the operation end and the slow progress of additional issuance are signals that deserve more vigilance.

"One Hot, One Cold"

From the fund level, Chengtou Kuanting Affordable Rental Housing REIT still delivered an excellent report card in the first half of the year: revenue of 91.6745 million yuan, net profit of 42.0492 million yuan, and EBITDA of 65.565 million yuan, up 1.51%, 2.58% and 1.64% year on year respectively.

Dividends were also paid as usual. The distributable amount for this period is about 64.9691 million yuan, with a distributable amount per unit of 0.065 yuan and an annualized distribution rate of 3.45%; calculated based on the fundraising scale of 3.05 billion yuan, the annualized distribution rate of the distributable amount realized in the first half of the year is about 4.30%.

However, almost all of the 64.9691 million yuan distributable amount is "old money". It was barely put together by adding back 24.2064 million yuan of depreciation and amortization, and then increasing 12.6887 million yuan through "reserves for expenses in previous periods".

In other words, the current net profit of 42.0492 million yuan and EBITDA of 65.565 million yuan indicate that the operating hematopoietic capacity is still acceptable, but more than half of the distributable amount comes from the release of previous reserves, which has an obvious flavor of "living off past gains".

In fact, affordable rental housing REITs have heavy fixed assets and large depreciation and amortization, so their net profit is naturally lower than EBITDA and distributable amount, which is not a problem in itself. The real problem is whether the current operating cash inflow, after deducting principal repayment, capital expenditure and reserves, is still sufficient to cover the distribution. If not, it is necessary to make up for it by releasing previous reserves, which is a signal that needs vigilance.

More critically, the EBITDA of 65.565 million yuan, which reflects the real operating level, only increased by 1.64% without any expansion of asset scale, which is obviously approaching the ceiling.

At the project company level, the total revenue of the two projects in the first half of the year was 91.1288 million yuan, a slight year-on-year increase of 1.45%; EBITDA was about 70.8134 million yuan, a year-on-year increase of 1.04%, with both indicators growing slowly at the same pace.

Horizontally compared in the affordable rental housing REITs track, the growth rate of just over 1% has already fallen behind. The aura of "top performer" is more supported by the past low valuation dividend, rather than the current operation outperforming peers.

By breakdown, Shanghai Chengchi, which holds the Jiangwan Community, is the only source of incremental growth. It achieved rental income of 59.1131 million yuan during the period, a year-on-year increase of 2.43%, and its gross profit margin rose from 59.88% to 60.58%.

Shanghai Chengye, which holds the Guanghua Community, has become a "burden". Its rental income in the same period was 32.0156 million yuan, a slight year-on-year decrease of 0.31%, with negative growth in revenue; its gross profit margin remained flat at 62.03%, the occupancy rate dropped from 97.45% to 94.13%, and the actual leased area shrank by 3.41% year on year. In the affordable rental housing industry that emphasizes "full occupancy" the most, this is equivalent to a yellow light on the asset side.

A more hidden erosion comes from rigid expenses. Among operating costs, the operating management fee of Shanghai Chengchi increased by 2.25% year on year to 9.0645 million yuan, which is faster than the 2.43% revenue growth rate, meaning the management fee "outperformed" the revenue.

In addition, the book value of investment real estate of the two project companies decreased slightly by 0.82% and 0.81% respectively, which is within the normal depreciation range.

Rent "Loss of Ground"

The underlying assets of Chengtou Kuanting Affordable Rental Housing REIT are two affordable rental housing projects in the Yangpu New Jiangwan City sector, with a leasable area of about 122,000 square meters for rental housing.

Overall, in the first half of the year, the two projects achieved an overall occupancy rate of 94.16%, up 0.9 percentage points year on year; the rent collection rate was 99.96%, down 0.03 percentage points slightly year on year; the remaining lease term was 334.41 days, 10.28% longer year on year, easing the pressure of lease renewal within the year.

However, the unit rent is 130.96 yuan per square meter per month, down 0.93% year on year. This is not a sign of a booming market, but an active concession to maintain the occupancy rate through "trading price for volume".

Extending the cycle, the trend is clearer: the unit rent of the fund's underlying assets dropped from 132.54 yuan at the end of 2024 to 131.86 yuan at the end of 2025, and now it has slipped to 130.96 yuan. Looking at a longer time axis, it is more like a slow blood loss.

Comparison by community: the Jiangwan Community traded lower prices for higher volume. During the period, its unit rent decreased by 1.72% year on year to 129.33 yuan, in exchange for a 3.12 percentage point increase in occupancy rate to 94.18% and a 15.99% longer remaining lease term, recovering customer stickiness.

The unit rent of Guanghua Community during the period was 134.01 yuan, up 0.57% year on year, at the cost of a 3.32 percentage point drop in occupancy rate and a 3.41% shrinkage in leased area.

The real decisive factor lies in the supply side. During the reporting period, two competing projects were added in the surrounding area, including the affordable rental housing project "Shengguangli Apartment" with 658 units and the market-oriented rental project "Anzhu · New Jiangwan City Home" with 747 units, totaling 1405 units, both of which have been in stable operation.

What's more, there are already 6 competing projects in the same area of the New Jiangwan City sector. Under the general trend of continuous increase in the supply of affordable rental housing in Shanghai, the 1405 new units are just the appetizer. Although the remaining lease terms of the two major communities are longer than last year, they will still face concentrated lease renewal within the year. Coupled with the weak rent growth, it is highly uncertain whether the 90% "lifeline" occupancy rate can be maintained.

When a large number of competing projects enter the market and the existing rents are still declining, the moat of "location advantage" is being gradually filled by the flood of supply.

There is still good news about the tenant structure. According to the financial report, the underlying assets mainly cover industries such as the Internet, finance and education around the projects and along the subway lines, including Internet enterprises such as ByteDance, Bilibili and Papergames, as well as universities such as Fudan University and Tongji University. No single customer accounts for more than 10% of the cash flow, with a decent degree of dispersion.

On the additional issuance side, which is the only imagination for public REITs to break through the current predicament, it is also the most suspenseful and time-consuming part. The fund announced as early as August 7, 2025 that it planned to purchase the Pujiang Community (about 2362 units) and Jiuxing Community (about 1230 units) in Minhang District. A year has passed, and it is still in the due diligence stage.

If the additional issuance fails to land for a long time, the fund cannot get rid of the label of "sluggish"; even if it lands, it still has to pass the test of "whether the valuation is too high".

The mid-year report of Chengtou Kuanting Affordable Rental Housing REIT has maintained dividends, cash flow and occupancy rate, but failed to maintain the rent. The recovery of Jiangwan relies on price reduction, the decline of Guanghua relies on rigid support, and the script of additional issuance still stays at the beginning.

For investors who only pursue stable distribution, the certainty of this fund still exists, and they can just hold it for dividends; for investors who expect growth, the refined operation of the asset side and the pace of additional issuance are the only decisive factors in the second half.

This article is from the WeChat Official Account "View", written by View New Media, and published with authorization from 36Kr.