:Turmoil at China's largest private developer Country Garden could set off a 'vicious cycle' of financing stress on the country's real estate investment trusts (REITs), brokerage J.P. Morgan warned on Monday. The brokerage flagged issues at Chinese conglomerate Zhongzhi Enterprise Group, after two Chinese lis
:Turmoil at China's largest private developer Country Garden could set off a"vicious cycle" of financing stress on the country's real estate investment trusts , brokerage J.P. Morgan warned on Monday.
REITs would be forced to dip into their profits if they fail to honor payments on debts, analysts said, putting at risk nearly 2.8 trillion yuan worth of assets under the management. "Unlike banks, which have holding power and are able to roll over credit to wait for an eventual resolution, alternative financing channels such as trusts may default once trust investors are unwilling to roll over the products," J.P.Morgan analysts led by Katherine Lei said in a note.
China's property sector has been grappling with a liquidity crunch since late 2021 when China Evergrande Group collapsed and triggered a series of debt defaults.
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