The Research of Chinese Real Estate Investment Trusts
|School||Dongbei University of Finance|
|Keywords||Real Estate Investment Trust (REITs) Equity REITs|
Since 1998, China’s real estate has a rapid development. China’s real estate industry has become one of important industries and plays an important role in the development of the national economy. While the real estate industry is a typical capital-intensive industry, adequate financial is very important to support to the real estate development.At present, China’s real estate development presents two features:One hand, China’s real estate development is over-reliance on bank credit and has small capital financing channels; On the other hand, the house price is rising in recent years. To prevent and suppress possible real estate bubble, the government introduced a series of macro-control policies on the real estate industry, which make real estate enterprises’capital chain faces serious challenges. It must to embark on widen financing channels. With China’s rapid economic development, a lot of money is also seeking investment channels.The Real Estate Investment Trusts(REITs) provides a contact platform for supply-side and demand-side, so learn from foreign REITs models and make a suited model to China become priority. Since the international financial crisis, China has successively promulgated policies to propose the development of REITs.Chapter 1 introduces the background and significance of the topics. The real estate companies are facing severe financial challenges. In order to improve this situation, it becomes urgent to broaden the financing channels. REITs is a good tool.There is also policies for the development of REITs, which is one meaning of this study. There is a brief description about innovation and inadequacies of this paper.Chapter 2 is a brief overview of REITs. It introduces the definition, the characteristics, classification of the REITs.Chapter 3 makes statistic analysis and calculates data about different stages of real estate. Then, the author analyses the risk caused by the real estate.Chapter 4 analyses the necessity and feasibility of development of REITs. Analysis of the development of REITs can spread operational risks of the banking industry, broaden the financing channels of real estate enterprises and increase the capacity of capital markets and investment products. Finally it analyzes the qualifications of China’s REITs development.According to foreign countries’experiences and our country’specific situation, Chapter 5 makes a detail design model REITs for China that is a equity trust, closed and listed fund. The main focus of analysis and research is the participates and direction of investment. Finally the author proposes the laws and regulation, information disclosure, risk aversion, monitoring systems and personnel training and other proposals.Finally, there is a brief conclusion about the main contents of this article, and about future prospects.In this paper, there are two innovations. First, trust company as the trustee, the trust company appointed the administrator or professional fund manager to manage the fund. The manager must be approved and supervised by relevant agencies. As there are no relevant agencies of the REITs regulation, it is recommended the SFC to approve. In the direction of investment analysis, with the combination of the status of residential property, REITs can towards three investment directions:to invest in government-supported rural community construction, in affordable house in the city, and in long rent house in the city. According real estate development phase, REITs can invest in different stages of real estate project.Normative development of REITs is very important to real estate and capital market in China. But now the real estate trust products mainly through loans invest to real estate. REITs can be seen as a new real estate investment model. Whether it can bring the real estate a new change, it still needs much effort. The legal norms and regulatory mechanisms need have constant improvement. This article is not yet mature in some perspective to our REITs research, and mainly provides some proposals of our real estate development.