Risks in REITs controllable: CBRC official

Risks in China's real estate investment trust industry remain "controllable" despite more than 250 billion yuan ($39.3 billion) of redemptions due over the next two years, an official with the banking regulator said on Thursday.

Outstanding real estate trusts reached 695.3 billion yuan as of the end of June, said Ke Kasheng, head of the nonbank financial institution under the China Banking Regulatory Commission.

Amid ongoing regulations on a cooling property market, the redemption of trusts will reach 71 billion yuan this year and 184.2 billion yuan in 2013, Ke said.

"Although there is hidden trouble in some projects, it is not likely to lead to a regional or systematic risk," Ke said.

According to Ke, the property trusts' financing accounts for only 6.1 percent of the banking industry's total funding for the real estate sector and 12.6 percent of the entrusted assets of Chinese trust companies.

The relatively small size of the financing means it will not have a substantive effect on the property sector or the trust industry, he said.

Property trusts' projects are handled independently, and risks found in single cases will not spread to other projects, Ke said, adding that the CBRC's strict regulation of the sector has helped to rein in risks.