China's ambitious social housing initiatives may foster growth in the country's infrastructure real estate investment trust (REIT) market, S&P Global Ratings said in a Wednesday release.

The rating agency estimates a doubling in the number of social housing infra-REITs within the next 18 months, as well as further expansion as the two markets exhibit synergies.

Listing social housing assets as infra-REITs raises the credit profiles of the originators, which are mostly state-owned enterprises, S&P said.

Although these issuances dilute ownership stakes to between 20% and 50%, the original operators will retain responsibilities and continue fulfilling policy objectives, the rating agency said.

Proceeds from listings could also fuel further investment in social housing projects, according to S&P.

However, not all projects are suitable for listing due to return requirements and financing costs, the rating agency said.

Social housing projects in higher-tier cities are generally more viable for REIT listings compared to those in lower-tier cities, S&P said.