China Hotel REITs: Major Groups Secure New Approvals

China's Booming Hotel Market Drives Investment Reforms

Mainland China has emerged as a significant performer in the Asia Pacific hotel market this year, prompting government authorities to expand the public real estate investment trust (REIT) framework. These regulatory adjustments aim to enhance international investment credibility within the sector.

Asia Pacific hotel investment reached $8 billion during the first half of 2026, marking a 21% increase year-on-year, according to CBRE. This surge reflects stronger travel demand and a new influx of capital, which has invigorated deal-making.

Notably, mainland China experienced a more than doubling of hotel transaction volumes during this period, demonstrating the market's robust activity and appeal to investors.

Major Groups Secure REIT Approvals

The China Securities Regulatory Commission (CSRC) implemented C-REIT reforms for qualifying four-star-and-above hotels at the end of 2025. Signs of momentum are now visible following a slow initial phase.

In June this year, Huaxia Fund's Jinjiang commercial REIT received regulatory approval for an established portfolio comprising 21 Jinjiang Metropolo-branded midscale and upscale hotels spread across 18 Chinese cities.

More recently, on 30 September, the CICC Kaiyuan Tourism Commercial REIT also secured official approval, underpinned by three Kaiyuan Mingdu hotels located in Hangzhou, Wenzhou, and Shengzhou.

Earlier this year, Fosun International applied to spin off its 1,314-key Atlantis Sanya resort in Hainan province into a Shanghai-listed trust, pending approval from the CSRC and the Shanghai Stock Exchange (SSE).

Private and State-Backed Trusts Advance

Beyond publicly listed entities, private and state-owned groups are also making strides in the hotel REIT market. In August, Huazhu Group's Huazhu Anzhu REIT gained approval for the Shenzhen Stock Exchange, becoming the first public hotel REIT led by a private hotel group.

This trust incorporates three mature properties: the Mercure and Ji Hotel projects at Guangzhou Tianhe Sports Centre, and the Crystal Orange Hotel project at Shanghai Jiangqiao Wanda. Its launch is anticipated later this month.

Additionally, local state-owned assets are entering the market: in June, the Shenzhen Stock Exchange accepted the GFHA Zhuhaichengfa Commercial REIT, with The Langham, Guangzhou as its underlying asset. In July, Caitong Asset Management - Yuanzhou Group Hotel Holding received approval from the Shanghai Stock Exchange for Yuanzhou Group's self-owned hotel properties.

August also saw Changchun High-tech announce its plan to use the Changchun High-tech InterContinental Hotel, Changchun High-tech Holiday Inn, and associated underground car parks as underlying assets for a new REIT.

Exchange Requirements and Market Outlook

The Shanghai and Shenzhen stock exchanges impose strict review guidance for REIT applications, emphasising clear ownership, stable operations, reliable cash flow, and credible valuations. Generally, an asset must have been operating for at least three years, demonstrating positive average net profit or operating cash flow over the previous three years.

A minimum assessed value of RMB1 billion (approximately €133.8 million) is also typically required for the underlying property in a first-time public REIT application. Steve Carroll, Head of Hotels & Hospitality, Asia Pacific for CBRE, observes that hotels have become one of the most compelling real estate investment sectors in Asia Pacific.

He attributes this to strong travel demand and limited new supply, which support both operating performance and asset values across the region. JLL also noted that auction sales and disposals by indebted developers, including R&F Group’s sale of nine assets, are expanding the pool of hotels available to buyers, complementing the REIT channel.

Implications for Asia's Hospitality Sector

The increasing momentum in China's hotel REIT market provides new avenues for hotel owners to realise asset value and offers credible exit strategies for international investors. This regulatory evolution, combined with robust travel demand across the region, could stimulate further development and modernisation of China's hotel infrastructure.

For travellers, this potentially translates into an expanded selection of higher-quality accommodation options.

The enhanced transparency and liquidity offered by REITs are likely to attract more capital into the sector, strengthening China's position as a pivotal market within Asia Pacific's dynamic hospitality landscape and potentially influencing investment trends in neighbouring Asian markets by demonstrating a viable model for securitising hotel assets.