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Peggy Ye

Foreign investors are starting to look again at mainland China’s commercial property market after years of retreat, drawn by sharply lower asset prices, wider yields and cheaper yuan financing, even though cross-border capital remains a small fraction of the overall market, analysts said.
The shift did not yet amount to a broad return of foreign money, they added.
Instead, some international investors were finding ways to participate through China’s domestic capital markets, using onshore financing and real estate investment trust (Reit) structures to invest in selected assets and create an eventual route to recycle their capital, analysts said.
“While cross-border capital mostly stays on the sidelines, the interest in re-engaging with mainland China’s commercial real estate market has been improving in the past 12 months, led by Asian investors,” said Glyn Nelson, head of capital markets research for the Asia-Pacific region at CBRE.
The investors were targeting regional shopping malls, multifamily projects, logistics assets and offices in first-tier cities, Nelson added.
The shift follows years of weak foreign participation.
Cross-border commercial real estate investment in mainland China fell sharply after 2022 amid monetary divergence and geopolitical tensions, CBRE said.
Foreign capital excluding Hong Kong accounted for less than 3 per cent of mainland Chinese transaction volume from 2023 through the second quarter of 2026, it added.
One reason the market was becoming easier to re-enter was that exit options were evolving, analysts said. Reits allowed property owners to pool income-generating assets into investment vehicles and sell interests to investors, creating an alternative to a conventional property sale.
For international investors, that could provide a way to recycle capital without having to sell an entire property, they added.
The mainland Chinese Reit market is moving into a more sophisticated phase
Andrew Chan, Cushman & Wakefield
China’s Reit market is rapidly expanding beyond infrastructure into commercial property. The mainland accounted for 21 of Asia’s 27 new Reit listings between the end of 2024 and March 2026, far ahead of Japan and Thailand, according to Cushman & Wakefield.
There is already evidence of international managers using the structures.
CapitaLand, backed by Singapore state investment company Temasek, listed its China Commercial C-Reit in September last year, while Canadian global investment firm Brookfield listed the CICC Blinq Multifamily Private Reit in June.
The two deals illustrated a model in which assets remained under international management while capital was recycled through domestic investment vehicles, Nelson said.
The investment equation has also changed. China’s one-year loan prime rate remained at 3 per cent, while cap rates in first-tier cities were more than 4 percentage points above the 10-year government bond yield at the end of the second quarter, the widest spread in the Asia-Pacific region, according to CBRE.
For international investors with onshore operations, cheaper yuan financing could support the acquisition, repositioning and leasing of assets that had been repriced after years of falling values, analysts said. The expanding Reit market provided another potential mechanism for recycling capital.
China had 79 public infrastructure Reits with a combined market value of about US$32.1 billion as of March 31, according to Cushman & Wakefield. A commercial real estate Reit pilot launched in late 2025 has expanded the market to include offices, shopping malls, hotels, outlets and mixed-use properties.
By June, China had 58 property rights-backed public Reits with a combined market capitalisation of 143 billion yuan (US$21.3 billion), while 60 private Reits had been filed, according to CBRE.
Pilot land-tenure renewal policies in Guangzhou and Shanghai were also helping address uncertainty for commercial property investors, according to CBRE.
“The mainland Chinese Reit market is moving into a more sophisticated phase,” said Andrew Chan, managing director and head of valuation and advisory services for Greater China at Cushman & Wakefield.
For now, however, the opening remains selective.
“Investors are very selective on the location quality and operational strength of assets,” Nelson said.


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Cross-border capital remains thin, but cheaper yuan financing and an expanding Reit market are opening pathways for global funds, analysts say


Cross-border capital remains thin, but cheaper yuan financing and an expanding Reit market are opening pathways for global funds, analysts say.


How China’s growing Reit sector is giving foreign property investors a route back in

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Cross-border capital remains thin, but cheaper yuan financing and an expanding Reit market are opening pathways for global funds, analysts say

Cross-border capital remains thin, but cheaper yuan financing and an expanding Reit market are opening pathways for global funds, analysts say