Prologis Guangzhou Development Zone Logistics Center is among the three assets in the REIT (Image: Prologis)
Ten days after commencing trading on the Shenzhen stock exchange, a real estate investment trust sponsored by the world’s largest logistics developer continues to trade below its IPO price as Chinese REITs close out a tough second half of the year.
After raising RMB 2.45 billion ($348 million) through an initial public offering which issued 400 million units at RMB 6.121 ($0.87) each, ChinaAMC Prologis Warehousing and Logistics REIT slid around 12 percent in its first two days of trading on 19 and 20 December and closed on Friday at RMB 5.60, nearly 9 percent below its IPO price.
Prologis pointed to the trust as an opportunity to expand its mainland business, where the company has 5.3 million square meters (57 million square feet) of properties across 24 cities, according to its website.
“This REIT expands how we participate in China’s logistics real estate market. It creates room to grow our portfolio, sharpen our capital strategy and accelerate development in locations where customers need capacity,” Prologis said in a statement.
Oversubscribed Then, Sliding Now
Although Prologist reported that institutional investors had oversubscribed the book-building tranche by 235.8 times, the REIT plunged 10.2 percent on its first day of trading. The price fell still further on the second day of trading before regaining some ground in subsequent days.
Prologis China chair Jane Wu
The REIT sponsored by US warehouse giant Prologis holds three of the company’s logistics properties in Guangdong province and is managed by Beijing-based China Asset Management Co Ltd.
The three properties in ChinaAMC Prologis Warehousing and Logistics REIT’s portfolio span approximately 349,655 square metres of gross floor area with an aggregate appraised value of approximately RMB 2.17 billion as of March, according to the trust’s prospectus. San Francisco-based Prologis holds 20 percent of the REIT’s units.
Prologis REIT’s assets include the 127,900-square-metre Prologis Guangzhou Development Zone Logistics Center, the 149,900-square-metre Prologis Dongguan Shipai Logistics Center, and the 81,500-square-metre Prologis Dongguan Hongmei Logistics Center.
The portfolio generated net profit of RMB 17.4 million in 2022 and RMB 22.3 million in 2023. In 2024, net profit from the properties declined to RMB 4.3 million as the Guangzhou project booked an RMB 15.4 million asset impairment loss triggered by the risk of early lease termination by a tenant.
The REIT’s prospectus also flagged occupancy risks, with occupancy at the Guangzhou project slipping from 99.6 percent in 2022 and 99.7 percent in 2023 to 91.8 percent in 2024, due to vacancies from expiring leases. The Dongguan Shipai and Dongguan Hongmei projects maintained 100 percent year-end occupancy from 2022 to 2024.
The REIT’s prospectus also pointed out that leases are set to expire or face early termination at year end for approximately 27,659 square meters of space – equivalent to around 8 percent of the portfolio’s total leased area – with negotiations with prospective tenants regarding this space still ongoing at the time the document was filed in September.
Investor Sentiment Cools
The cool reception for ChinaAMC Prologis Warehousing and Logistics REIT aligns with a second half slide for mainland REITs, after the market rose in the first half of this year.
The CSI REIT Total Return Index, which tracks the price of REITs on mainland stock exchanges, surged nearly 14 percent in the first half of 2025, a rally analysts attribute to the asset class’s stable dividends, which have become attractive to institutional investors amid a low rate environment.
That same index has declined over 7 percent since the end of June, as capital has flowed out of REITs into stocks, and investors have taken profits out of their real estate trust holdings, according to analysts.
Changes in policy in recent months have also influenced the opening performances of China-listed REITS, according to analysts at Huaxi Securities.
Under guidance issued in June, sponsors can now set IPO prices can within plus or minus 25 percent of the industry average, compared with plus or minus 10 percent previously, allowing issuers to price more aggressively and limiting opening day price surges.
Shenyang International Software Park REIT, a trust listing business park properties on the Shanghai exchange, fell nearly 2 percent during its first day on the bourse on 5 November and continues to trade below its IPO price. In late October, a REIT sponsored by China Overseas Land & Investment commercial rose just 3.29 percent on its debut day.
