GRA Market Weekly (2026-01-11)

Policy Watch

CSRC issues a notice on high-quality REITs market development and launches a commercial real estate REITs pilot

On 31 December 2025, the CSRC issued the Notice on Work Relating to Promoting the High-Quality Development of the Real Estate Investment Trust (REITs) Market, together with the CSRC Announcement on Launching a Commercial Real Estate Investment Trust Pilot. The Shanghai and Shenzhen stock exchanges concurrently revised and released their public REITs business rules in support of high-quality market development.

In the notice, the CSRC stressed the importance of developing commercial real estate REITs. Promoting the commercial real estate REITs market is a significant step for the capital markets in implementing the CPC Central Committee's and State Council's decisions on "revitalising existing assets and improving new supply" and "raising the share of direct financing". It is an effective means of supporting a new model of real estate development through market mechanisms, and is significant for the healthy development of the REITs market, for REITs to fulfil their function, and for continually improving the inclusiveness and adaptability of capital market rules.

The Shanghai and Shenzhen exchanges revised and released the Business Measures for Publicly Offered Real Estate Investment Trusts (REITs) (Trial) and refined the related supporting guidelines and manuals. The revisions aim to further improve the REITs business rules framework, strengthen market functions, ensure a smooth start to the commercial real estate REITs pilot, promote high-quality REITs market development, and enhance the effectiveness with which multi-tier capital markets serve the real economy. The revised measures optimise the REITs business rules in three main respects:

Refining the basic rules to reinforce the institutional foundations for compliant REITs operations
Optimising standards and specifications to further improve institutional adaptability and inclusiveness
Strengthening disclosure requirements to effectively protect investors' lawful rights and interests

Qiushi publishes a commissioned commentary on improving and stabilising property market expectations

The commissioned commentary "Improving and Stabilising Expectations for the Property Market", published in Qiushi on 1 January 2026, analyses current shifts in property market supply and demand, the challenges of transition, and the policy direction.

The article notes that the market is undergoing a deep adjustment driven by changes in the supply-demand relationship, but that the foundational position of China's real estate industry within the national economy has not changed and its future potential remains broad. The key is to understand the situation comprehensively and dialectically, and to stabilise and improve market expectations through decisive measures.

The article argues that China's property market is in deep adjustment, the underlying reason being that urban development has shifted from a phase of large-scale expansion to one focused primarily on improving the quality and efficiency of existing stock. The conditions for the industry's development have therefore changed profoundly, concentrated in the following areas:

An overall housing shortage has given way to broad aggregate balance alongside structural supply shortfalls, with affordable housing in particular in relatively short supply
Household demand has broadly shifted from "whether one has a home" to "whether it is a good home", with stronger aspirations for improved living quality
Developers' model of "high debt, high leverage, high turnover" is no longer sustainable and urgently needs to shift to one of low debt, low leverage and reasonable returns, upgrading from a "quasi-manufacturing" business to an integrated "product-service-operations" model

The article holds that whether judged by indicators such as household home-ownership rates, price-to-income and price-to-rent ratios, or by facts such as the share of property-related loans in bank lending, the share of property-related revenue in local fiscal income, and the share of housing wealth in total household wealth, the traditional real estate development model has run its course. The article emphasises that real estate remains a foundational industry underpinning the national economy.

The article concludes that, to shorten the adjustment period and smooth market volatility, a multi-pronged approach is needed to improve and stabilise expectations:

Maintaining policy intensity: policy intensity must match market expectations, and policy should be delivered in full at once. Consistency assessments of policy should be strengthened, alongside risk prevention and contingency planning
Managing supply: strictly controlling new supply while revitalising existing stock, and advancing the construction of "good homes" in an orderly manner. Developers should be supported in accelerating the shift from a focus on new home sales towards holding more investment property and providing high-quality, diversified housing services, with the foundational systems for commodity housing development, financing and sales improved to enable a smooth transition from the old model to the new
Strengthening information and public communication: enhancing monitoring of key property market indicators including prices, and using multiple measures to foster rational public expectations for the market

People's Daily on housing provident fund reform: three directions for 2026

On 8 January 2026, People's Daily published "What Signal Does the Central Leadership's Mention of the Housing Provident Fund Send?", suggesting that major reform of the provident fund is likely. Starting from the fund's uses, its problems and its room for improvement, alongside the practical needs of China's housing development, the article sets out the overall objectives of reform. Provident fund reform in 2026 will proceed along three main directions:

Broadening the range of permitted uses
Raising loan limits
Breaking down geographical barriers

MOHURD's Housing Provident Fund Supervision Department is strengthening top-level design, studying how to optimise provident fund administration and expand the scope for use of the funds. Under the theme of "investing in people", it is deepening the pilot allowing flexible-employment workers to participate in the provident fund system.

On service delivery, cross-regional coordination mechanisms will be improved and the "get one thing done efficiently" approach advanced, raising standardisation, consistency and convenience of service. Li Yujia, chief researcher at the Guangdong Housing Policy Research Centre, said that removing restrictions on provident fund use is likely to be one direction of reform.

Market Watch

Shanghai: two residential-use plots clear at reserve for RMB 4.57 bn in the first land auction of 2026

On 6 January 2026, Shanghai's land market held its first auction of the new year, with two residential-use plots from the tenth centralised land supply batch of 2025 successfully sold for a combined RMB 4.57 bn, both at reserve price - continuing the pattern of disciplined developer bidding. The two plots sit in the Senlan precinct of Pudong and the Lanxiang Lake precinct of Minhang.

Plot E04B-10 in Gaohang, Pudong, was won by Yuexiu Property for RMB 2.561 bn, an accommodation value of RMB 38,000/sqm. It is the first ordinary commodity housing plot offered in the Senlan area in nearly three years, backed by the 332 ha Senlan green space, close to Zhouhai Road station on Metro Line 6, with mature amenities including the No.6 Normal School Affiliated Primary School and Jincai Senlan Experimental Middle School and retail such as Senlan Garden City. Buildable GFA is c. 67,300 sqm, which will help fill the area's new-home supply gap.

The other plot, a mixed residential-commercial site in the Lanxiang Lake precinct of Minhang, was taken by local company Zijiang Group for RMB 2.009 bn, an accommodation value of RMB 33,400/sqm. With a plot ratio of just 1.01, and drawing on the Lanxiang Lake environment and the "Greater Zero-One Bay" innovation cluster, it is planned as low-density upgrader product in garden-apartment or stacked-townhouse formats, extending the product line of Zijiang Group's earlier Lanxiang Lake No.1 and similar projects.

Project Watch

China Life Capital acquires 60% interests in two LaSalle long-term rental apartment projects in Shanghai for RMB 629 m

Market sources report that China Life Capital and LaSalle Investment Management are in the closing stages of an equity transaction covering two long-term rental apartment projects in Shanghai. China Life Capital will acquire 60% interests in COZI East Bund and COZI Xinjiangwan for c. RMB 629 m, with LaSalle retaining the remaining 40% and keeping the operating and management mandate. Closing is expected this month.

COZI East Bund is at 18 Huangxing Road, Yangpu District, Shanghai, c. 100 m from Ningguo Road station on Metro Line 12 - a prime location. LaSalle acquired and refurbished the project in 2023 and it entered operation in Q1 2024, offering 370 units aimed primarily at young tenants.

COZI Xinjiangwan is at 758 Guo'an Road, Yangpu District, Shanghai, in the core of Xinjiangwan and c. 300 m on foot from Yingao East Road station on Metro Line 10. Formerly the self-held office-retail component of Xinghui Plaza, it was converted and upgraded into long-term rental apartments and entered operation in 2024. Both projects have been included in Shanghai's government-subsidised rental housing system, with over 20 years of land tenure remaining.

North Bund core asset Guoke Centre Tower 3 in Shanghai changes hands for RMB 1.046 bn

On 5 January 2026, SDIC Building 6 (Guoke Centre Tower 3) at 638 East Daming Road, North Bund, Hongkou, Shanghai, traded for a total of c. RMB 1.046 bn. The asset belongs to SDIC, with total GFA of 28,193.56 sqm across eight above-ground and three basement levels. It sits at the core of the North Bund shipping services cluster, facing south to the water and sun, connected to Waibaidu Bridge and Wusong Road Bridge, and looking across the river to the Lujiazui financial and trade zone - forming a "golden triangle" with the Bund and Lujiazui.

Market Data

Shanghai secondary home transactions reach 254,113 units in 2025, a four-year high

Shanghai's secondary housing market performed strongly in 2025, with 254,113 transactions for the full year as at 31 December. That exceeded 2024's 242,699 and was well above 2023's 192,543, marking a four-year high.

By month, the market showed the classic "golden March, silver April" pattern. March transactions reached 29,345 units, the year's peak, while April held at a high 23,416 units. Activity cooled somewhat in the second half, but volumes held broadly steady in the 19,000-21,000 unit range. December secondary transactions totalled 22,961 units, up 0.08% from November and the third-highest month of 2025 - evidence of market resilience and a shot in the arm for the year-end market.

Shanghai's rental asset base in 2025: c. 437,000 operating centralised apartments, with the top 50 owner-operators managing over 250,000 units

As at end-2025, Shanghai had c. 437,000 centralised apartment units in operation. The top 50 companies in the city's rental sector by owned-asset management scale collectively managed over 250,000 units, an increase of more than 63,000 units on the 187,000 units a year earlier. Owned assets now account for more than half the market and show a pronounced concentration among leading players.

By category, the top 30 by owned-asset management scale comprise 14 local SOEs, eight central SOEs, one mixed-ownership reform enterprise and seven private companies. This year Huawei Investment & Holding climbed rapidly in the owned-asset management rankings on the back of two very large Qingpu projects entering the market, ranking just behind V-Link Group, an established operator that has moved from asset-light to asset-heavy.

With no new R4 rental land supply and the concentrated construction cycle now complete, growth in owned-asset project scale slowed markedly this year versus prior years: new supply from owned-asset projects was over 96,000 units in 2024 but only 74,000 units in 2025. On the one hand, policy has shifted from large-scale demolition and rebuilding to conversion of existing stock, and SOE brands have begun investing in revitalising and developing existing assets - small-scale conversion projects typified by Ruiyuanli and Guangmingli have sprung up across the city this year. On the other hand, SOEs' owned assets have largely already come to market and their rental asset pipelines are running dry; as a result, SOE operating brands typified by New Huangpu Zhumengcheng and Shanghai Real Estate's Chengfang have begun actively expanding asset-light management output, launching third-party operating mandates such as Yunjiju | Zhumengcheng and Henghuiyu.