Mainland China has been one of the stars of this year’s booming Asian Pacific hotel market and government authorities have tried to unlock international investment credibility through the expansion of China’s public real estate investment trust framework through regulatory changes.
Little wonder, Asia Pacific hotel investment reached $8 billion in the first half of 2026, up 21% year on year, as stronger travel demand and a new wave of capital helped revive dealmaking and mainland China saw hotel transaction volumes more than double, according to CBRE.
The key question is whether the reform in C-REITs implemented at the end of 2025 for qualifying four-star-and-above hotels by the China Securities Regulatory Commission, can helping create a potential new route for owners to realise value and create credible exit routes for international investors.
It’s early days but there are signs that the sector is gaining momentum after a slow start. in June, Huaxia Fund’s Jinjiang commercial REIT received regulatory approval for an established portfolio of 21 Jinjiang Metropolo-branded midscale and upscale hotels across 18 Chinese cities.
And in August, Huazhu Group’s Huazhu Anzhu REIT was approved for the Shenzhen Stock Exchange’s first hotel-focused commercial property REIT and the first public hotel REIT led by a private hotel group. It contains three mature properties, the Mercure and Ji Hotel projects at Guangzhou Tianhe Sports Centre, and the Crystal Orange Hotel project at Shanghai Jiangqiao Wanda. It is expected to launch later this month.
Similarly, earlier this year Fosun International applied to spin off its Atlantis Sanya resort into a Shanghai-listed trust, marking one of the most high-profile attempts yet to securitise a trophy hospitality asset with the 1,314-key resort in China’s southernmost Hainan province.
“The proposed spin-off is conditional upon, among other things, the approval by the CSRC and the SSE of the proposed listing,” the company said of the possible launch.
On 30 September, CICC Kaiyuan Tourism Commercial REIT was also officially approved, underpinned by three Kaiyuan Mingdu hotels in Hangzhou, Wenzhou and Shengzhou.
In addition, some local state-owned assets have also begun to bring hotels into the REIT market. In June, GFHA Zhuhaichengfa Commercial REIT was accepted by the Shenzhen Stock Exchange with its asset The Langham, Guangzhou, while in July, Caitong Asset Management - Yuanzhou Group Hotel Holding was approved by the Shanghai Stock Exchange, with underlying assets the self-owned hotel properties of Yuanzhou Group.
In August, Changchun High-tech announced that it plans to use the Changchun High-tech InterContinental Hotel, Changchun High-tech Holiday Inn and the underground car parks as underlying assets for a REIT.
Exchanges emphasise credibility
The Shanghai and Shenzhen stock exchanges’ review guidance places considerable emphasis on clear ownership, stable operations, reliable cash flow and credible valuation. The rules generally expect an asset to have been operating for at least three years, with positive average net profit or operating cash flow over the previous three years. They also set a general minimum assessed value of RMB1 billion (around €133.8 million) for the underlying property in a first-time public REIT application.
The framework also provides a mechanism for price discovery and the wider investment figures suggest that China’s REIT reforms have been introduced at a time when hotel capital is becoming more selective.
“Hotels have become one of the most compelling real estate investment sectors in Asia Pacific,” Steve Carroll, Head of Hotels & Hospitality, Asia Pacific for CBRE, insists. “Strong travel demand and limited new supply are supporting both operating performance and asset values. While higher borrowing costs may moderate investment activity in some markets during the second half of the year, investor interest remains concentrated in markets with strong growth and positive supply-demand fundamentals.”
Mainland China’s rebound also reflects opportunities beyond the REIT channel. Advisor JLL pointed to auction sales and disposals by indebted developers, including R&F Group’s sale of nine assets, as factors widening the pool of hotels available to buyers.
“With stronger-than-expected momentum registered in H1 2026, Asia Pacific is on track to achieve overall annual hotel investment volume growth of 15-20% from 2025 levels,” says Julien Nauori, Head of Investment Sales, Asia, JLL Hotels & Hospitality Group.
International investors look at China
Foreign investors have several potential routes into the market, although it won’t be plain sailing. China’s qualified foreign institutional investor framework, for example, permits approved investors to buy exchange-listed stocks and securities investment funds. That provides a possible route to listed REIT exposure, but it does not mean every overseas investor can buy every C-REIT freely, or that the products are automatically available through the trading platforms used in London or New York.
Foreign property groups may also participate as sponsors or asset owners, although that involves a more complex process than purchasing listed units. For example, Singapore-based CapitaLand has used China’s expanding REIT market to transfer commercial property into an onshore listed vehicle, giving it a way to recycle capital while providing domestic investors with exposure to income-producing assets.
Indeed, a domestic REIT could potentially broaden the buyer pool beyond the usual group of private-equity funds, insurers and corporate purchasers. But a Western sponsor would need to navigate local regulatory requirements, asset ownership and transfer arrangements, disclosure, tax and currency considerations, as well as evaluate whether the valuation.
For overseas investors, there are additional issues as the quality and consistency of financial reporting, governance, liquidity, distribution policy and the ability to exit the REIT units themselves. Currency movements and the availability of reliable hedging can also potentially affect returns for investors measuring performance in dollars, sterling or euros.
For those reasons, the immediate opportunity is therefore unlikely to see a rush of Western investors buying individual Chinese hotels. It is more likely to emerge through selected listed products, partnerships with domestic asset managers and sponsors, and investments where the property cash flows and governance are sufficiently transparent.
The reforms should probably be viewed as the opening of an investment platform but the spate of summer applications show that after a slow start, China’s hotel REIT market is beginning to gain momentum.