CHINA unveiled fresh measures to support the rental housing market Wednesday, making it easier for companies in the sector to raise money and paving way for retail investors to buy into securities such as real estate investment trusts (REITs).

China is working to boost the rental market to help rein in hot property prices and satisfy housing demand.

But while property prices have shot up, driven by speculation and demand from a growing middle class, China’s rental market has long been underdeveloped and largely remained unregulated, with rental yields easing to multi-year lows.

China will encourage companies to conduct rental housing asset-backed securitization, while strengthening supervision of such securities to fend off financial risks, the securities regulator said in a joint statement with the housing ministry.

“[We] encourage companies involved in the rental housing business to conduct asset securitization according to their operating conditions and based on their own financial needs,” the China Securities Regulatory Commission (CSRC) said, adding that the initiative will help lower corporate debt levels and satisfy demand for more investment options in China.

A “green channel” will be set up to speed up the issuance process, with the regulators pledging to create a favorable policy environment with better coordination among themselves.

China also will launch a real estate investment trust pilot program and support home rental companies in issuing equity-type securities with properties as underlying assets, the housing ministry said on its website.

Chinese developers have jumped on so-called quasi-REITs in recent months, scrambling for funds amid a financial crackdown on illegal financing to the property sector.

(SD-Agencies)