ESG PERFORMANCE AND MARKET DYNAMICS OF CHINA'S PUBLIC REITS — AN EMPIRICAL ANALYSIS

This paper explores the nexus between Environmental, Social, and Governance (ESG) performance and the market performance of China's nascent public Real Estate Investment Trusts (C-REITs) market. Based on a comprehensive dataset of 47 C-REITs as of October 2024, this research develops a proprietary ESG scoring system that is customized to the idiosyncratic nature of Chinese infrastructure assets. With the panel data regression analysis, we examine the impact of ESG scores on the key performance indicators like total return, dividend yield, and valuation multiples after controlling for asset type, size, and liquidity. We find a statistically significant positive correlation between superior ESG performance and higher dividend yields and valuation premiums, suggesting that C-REITs investors value sustainable operations and robust governance structures.