China took another step toward further opening its capital market to international investors as its first foreign-invested consumer real estate investment trust (REIT) made a solid debut on the Shanghai Stock Exchange recently.

Analysts said the listing marks a key milestone in the internationalization and diversification of China's REIT market and offers a model for deeper foreign participation under the country's ongoing capital market reforms.

CapitaLand Investment Ltd, a Singapore-based property asset manager, listed CapitaLand Commercial C-REIT on the SSE last week. It has raised 2.29 billion yuan ($321.65 million) by issuing 400 million IPO units at 5.718 yuan per unit, exceeding the initial estimate of 2.14 billion yuan by 7 percent.

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"This can be seen as one of the achievements of the opening-up of China's financial market," said Yang Haiping, a researcher at the Shanghai-based SIFL Institute. "More importantly, having a foreign institution serve as the operator and issuer of consumer infrastructure REITs in China could be an improvement measure aimed at enhancing the operational efficiency of underlying assets."

Yang said the introduction of foreign asset managers could help lift the overall performance and yield of China's publicly offered REITs, adding that the market is entering a new phase of transformation from a financing vehicle to an asset management platform.

"This transformation will accelerate as REITs benchmark against international standards for infrastructure operations, enhance efficiency and combine financial securitization with professional asset management," he said.

As of now, the SSE has seen 51 REIT projects successfully launched, raising a total of 134.39 billion yuan, said the bourse. Looking ahead, it will actively advance the opening-up of the capital market and promote the continuous optimization of the REIT market ecosystem.

Wang Peng, a researcher at the Beijing Academy of Social Sciences, said the core value of REITs lies in professional operations rather than mere scale expansion, and China's economic restructuring requires revitalizing existing assets.

"REITs serve as a tool for the securitization of asset management capabilities, shifting capital from land appreciation arbitrage toward cash flow value creation," Wang said.

Still, Wang highlighted structural challenges such as the lack of professional third-party institutions, insufficient regulatory application in valuation and information disclosure, and limited market depth.

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He called for improving governance by introducing independent directors and third-party evaluation mechanisms, expanding asset coverage to livelihood-related and emerging sectors, and strengthening investor protections through digital disclosure and compensation systems.

Echoing similar views, Bai Wenxi, vice-chairman of the China Enterprise Capital Union, suggested improving mechanisms for asset replenishment and attracting long-term funds into the capital market, such as pension and insurance funds.

Citing official data, Bai said consumer infrastructure REITs have emerged as a star performer in China's REIT market, delivering a 35 percent return in the first half.

Contact the writers at ouyangshijia@chinadaily.com.cn