The Shenzhen Stock Exchange's approval for a proposed public offering of 270 million yuan of securities backed by rental flats could signal a changing of tides in China's housing rental industry, the South China Morning Post reported, citing industry experts.

The offering from Beijing-based rental apartment operator China Young Professionals Apartment Management Ltd. is the first of its kind to secure approval for public distribution, according to the publication, noting that the go-ahead was given to the company less than 20 days following application.

Developers and asset owners in China have been allowed to issue asset-backed securities over the past two years, the paper reported Oct. 17. One company to have done so is the Warburg Pincus & Co.-supported, Shanghai-based apartment rental company Mofang, which issued asset-backed securities in January via a private placement.

Tianfeng Securities analyst Chen Baolin was quoted by the SCMP as saying that China Young Professionals Apartment's issuance is a "boost for China's leasing market," which operates in an asset-heavy model in the absence of real estate investment trusts.

According to the publication, industry experts also believe that the approval from the bourse, which came at a time when measures to curb home prices are in place, could also pave the way for the establishment of REITs in China.

An unidentified industry insider told the paper that some Chinese developers are already gearing up for the "historically symbolic" arrival of regulatory changes that will lay the groundwork for REITs in the country.

The Wall Street Journal reported Oct. 17 that China Young Professionals Apartment is the first housing rental quasi-REIT in China. It operates in 15 Chinese cities and targets apartments in prime locations to attract white-collar workers.

As of Oct. 17, US$1 was equivalent to 6.62 yuan.