The unveiling of the fourth-quarter reports for publicly offered real estate investment trusts (REITs) in 2024 has revealed a commendable performance across the board. According to data from Wind, the 51 publicly offered REITs that disclosed their fourth-quarter results collectively achieved a remarkable revenue of 3.56 billion yuan and a net profit of 258 million yuan during this period. Industry experts note that while some projects experienced profit pressure in the fourth quarter due to the varying types of underlying assets, the overall annual performance of REITs remains relatively strong. This suggests a robust resilience in the face of market fluctuations.

China's public REITs market has experienced rapid growth in recent years, backed by a continuous improvement in regulatory frameworks, steady growth in issuance scale, and an expanding variety of asset types. Tian Lihui, a finance professor at Nankai University, points out that REITs have gained increased attention due to their stable dividend mechanisms, moderate risk levels, higher liquidity, and the diverse asset allocation channels they provide. The clear stance of policy support, along with steady market expansion and rising awareness among investors, has further enhanced the activity within the REITs market, offering better trading opportunities for investors.

Among the various asset types, consumer infrastructure REITs have undoubtedly emerged as the star performers in the fourth quarter of 2024. Analysis from Zhongjin Company reveals that most consumer REIT projects showed stable or even upward trends, signaling a robust operational outlook. When assessed through the lens of quarterly revenue completion rates (based on recruitment documentation), it is noteworthy that, apart from Jinmao REIT and Bailian REIT, all other projects had a completion rate exceeding 100% for the quarter. Chuangjian Aolai REIT and Wumart REIT, in particular, reported impressive quarterly completion rates of 132% and 120%, respectively.

The outstanding performance of consumer REITs is attributed to their high-quality underlying assets, excellent operational management capabilities, and a gradually recovering consumer market. The underlying assets of consumer REITs are typically located in prime geographic areas with strong consumer demand, situated within mature and stable operational business centers that demonstrate substantial growth potential. Additionally, the original stakeholders in consumer REITs are often veteran players in the commercial real estate sector, possessing formidable operational management expertise. This background significantly enhances the operational efficiency of underlying assets, leading to increased revenues for the REITs.

Analysis by Mingming, chief economist at CITIC Securities, indicates that the performance evaluation of consumer REITs generally encompasses several factors, including operating income, earnings before interest, taxes, depreciation, and amortization, distributable amounts, and corresponding completion rates, alongside metrics such as foot traffic, membership numbers, and various marketing events conducted during the quarter. From a macro perspective, attention is also paid to indicators like the social retail landscape in the regions where these assets are located.

The robust performance of consumer REITs in the fourth quarter of 2024 is closely linked to the revival of the consumer market during the same period. Tian Lihui emphasizes that the data from the quarterly reports reflect consistently high rental rates for the underlying assets of consumer infrastructure REITs, all averaging above 95%. This trend signifies strong consumer demand and the qualitative attributes of the REITs' underlying assets. The revival of the consumer market has resulted in increased foot traffic, which correlates with the growth of consumer demand, ultimately driving rental rates and returns higher for these REITs.

Notably, public fund managers have expressed heightened attention to the sustainability of recovery in the consumer market, alongside the evolving long-term trends. Given that the investment horizons for public REITs are typically extended, there's a necessity for long-term asset management post-investment. Consequently, the evolving dynamics of consumer behavior are pivotal in guiding project operations and serve as a foundational element for annual budgeting and mid-term planning. The structural changes in consumption patterns across different age demographics and regions are also focal points for scrutiny. For instance, the younger demographic's tendency towards impulsive spending and preference for personalized products showcases the need for continuous monitoring of these trends to timely adjust investment and operational strategies to support store operations and product selection processes.

Market experts believe that the ongoing initiative to expand domestic demand has become a crucial guiding direction for current policies. In this context, strategies like "upgrading old for new" and the issuance of "consumption vouchers" may bolster the performance of consumer REITs, catching the attention of various institutional investors. Mingming has indicated that both strategic allocation and offline data suggest that securities brokers, insurance capital, and other institutional investors are actively participating in the investment landscape of consumer REITs.

With insights drawn from the fourth-quarter disclosures in 2024, Zhongjin Company posits that the competition within consumer infrastructure is undergoing marginal evolution in the current macro environment. Unlike first-tier cities, core retail properties in second and third-tier cities appear better positioned to maintain competitiveness and growth trajectories. Furthermore, consumer behavior is becoming more rational, with an emphasis on experiential consumption, particularly in sectors like sports and outdoor activities, lifestyle brands, and new dining experiences that have strong social and community engagement attributes. Purpose-driven and experience-based consumption trends are on the rise, while the operational capabilities and brand value of these operators may attract and encompass a broader consumer base, ultimately enhancing operational efficiency and profitability across the board.