China expanded a pilot program for publicly traded real estate investment trusts (REITs) for the second time to include more types of commercial properties in a push to increase infrastructure investment amid waning economic growth.

The REIT pilot program, launched in 2015 and expanded in 2021, will be broadened again to include consumer-related infrastructure projects, such as department stores, shopping malls and farmers' markets, according to a notice issued on Friday by the China Securities Regulatory Commission.

Issuers of such REITs should be independent legal entities holding consumer-related infrastructure and carrying out related business and should not be engaged in commercial residential development, according to the notice. Such REITs should not be used as a financing tool for commercial residential projects, the regulator said.

REITs, which raise funds to invest in income-generating real estate assets, are popular in developed markets, but China has been wary of them partly out of concern they could fuel housing price inflation. In 2015, the country's first publicly traded REIT launched with investments in a commercial real estate project in the southern megacity of Shenzhen. However, it remained the only such investment for years amid legal, regulatory and tax issues.

China's REIT policy was originally intended to promote the development of the real economy and bolster the capital market, not to respond to the real estate sector slump or help raise funds for residential development, said Chen Cong, an analyst at Citic Securities.

The construction and holding of consumer-related infrastructure have nothing in common with residential housing development in terms of profitability and capital flow, requiring special capability for developers, Chen said. Companies with long-term independent development experience in commercial retail and shopping centers are expected to benefit from the expansion of the pilot program, Chen said.

As the pandemic piled financial pressure onto localities, Beijing decided to kick off a pilot program for infrastructure-related REITs in April 2020. The first batch of publicly traded infrastructure REITs raised around $4.8 billion for infrastructure projects and debuted in June 2021.

In the first expansion of the pilot program, not only infrastructure initiatives were allowed but also affordable rental properties, industrial parks, logistics assets, water treatment and clean energy properties, and tourism infrastructure.

As of the end of February, there were 25 publicly traded REITs, raising over 80 billion yuan ($11.65 billion).