The nation will have a rental housing market of 5.4 billion square meters with annual rental income of some 4 trillion yuan ($611.7 billion) by 2027, according to a new research note on the rental housing market.

The report, released by Shanghai-based CRIC China, the real estate services provider, said that some 190 million migrant residents or 80 percent of nationwide migrants in urban areas will be housed in rental projects. The 4-trillion-yuan annual rental income would be 138 percent higher than that of 2017.

“Land supply plans in large cities will support growth of rental housing projects,” the report said.

Beijing will offer 30 percent of its supplies for residential housing projects to the leasing market in the next five years.

In Guangzhou, Guangdong province, rental housing will account for 20 percent of housing supplies between 2017 and 2021, and the number for Shenzhen is also 20 percent, between 2016 and 2020, according to urban planning authorities in these cities.

Yan Yuejin, an analyst and research head with CRIC China, said rental housing projects will mainly emerge and grow fast in 36 first and second-tier cities in the next few years.

“We estimate that 30 percent of housing in first-tier cities will be rental housing and 20 percent in second-tier cities. Nationwide, for the 36 cities, the average share would be 25 percent,” he said.

Jenny Wu, East China senior director and head of residential of Cushman & Wakefield, a real estate services provider, said policies for housing land supplies in large cities are in alignment with urban planning and cities’ overall positioning and development strategy. For example, in Shanghai, land supplies for housing rental projects, unlike that in previous years, are now close to city centers and high-tech industry zones.

“More rental housing will be supplied to meet demands from talent in the city,” Wu said.

Shanghai will add 700,000 rented homes, more than 60 percent of new market-oriented housing supplies, from 2016 to 2020.

A number of large developers have launched plans for long-term rental housing projects across China in recent months, including Beijing-based Longfor Properties and Shenzhen-based China Vanke.

Country Garden, based in Shunde, Guangdong province, is one of the latest projects that target young residents who will live in rental housing projects. The developer released a plan for developing one million homes for long-term housing projects in the next three years.

“Currently, long-term rental housing projects are not lucrative. However, in the long run, the great growth potential and steady cash flow that rental projects will bring cannot be neglected,” said a research note on the long-term rental housing market by Cushman & Wakefield.