Dissertation > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Trust

Study on Establishment of Real Estate Investment Trusts in China

Author LuLan
Tutor DingLi
School Southwestern University of Finance and Economics
Course Finance
Keywords Real Estate REITs Model innovation
CLC F832.49
Type Master's thesis
Year 2009
Downloads 118
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China's domestic economic growth in the real estate industry is a source of power, but also more profitable industry. Can drive the steel, cement, electrolytic aluminum, building materials and other related industries, is to improve living conditions, creating jobs, promoting China's pillar industry of national economic growth. Therefore, the healthy development of the real estate industry on the sustainability of the development of the entire national economy has an extremely important significance. It acts as a highly capital-intensive industry, the financing depends significantly higher than the general industrial and commercial enterprises, and its development is inseparable from the support of the financial sector. After years of exploration, a market-oriented, and gradually adapt to conditions of housing system has been basically established, and also formed a bank credit-based housing finance system. But this system can not adapt in recent years begun to show signs of: real estate development funds through deposit and advance payment, corporate self-financing and bank loans, the main source of these types of analyzes, self-financing mainly from buyers bank mortgage loans, down payment calculated that about 70% of corporate self-financing from bank loans ①; deposit and advance payment of 30% of the funds have come from bank loans, real estate development in order to calculate the proportion of the use of bank loans at 55% or more. It also makes real estate developers, funding sources are limited, particularly in the national macro-control monetary tightening into a business or banking crisis, this source of funding limitations become more apparent. And in this case banks have assumed great risk. People's Bank of China promulgated this \Especially in late September 2005, the CBRC issued the \In this context, looking for a new and abundant, stable sources of funding financing channels for enterprises financing difficulties of China's real estate is particularly important. The successful operation in foreign countries for many years, the real estate business is one very important way of financing ---- Real Estate Investment Trusts (REITs) will have this advantage, this financing model is the main content of this paper. REITs (Real Estate Investment Trust, referred REITs) is actually a securitization industry investment fund is an income certificate to issue a qualified majority pooling investor funds, real estate investment institutions by specialized investment management management, and the consolidated income investments pro rata to investors as a trust fund. The emergence of REITs, so that everyone had large-scale commercial real estate investment opportunities, which by virtue of its advantages, a clear investment performance, stable income and high mobility characteristics attracting a large number of funds. REITs originated in the mid-19th century in Boston, Massachusetts business trust established. In recent years, the rapid development of the securities market in various countries it. According to incomplete statistics, the end of 2007, the United States a total of more than 200 REITs in the New York Stock Exchange, American Stock Exchange or the NASDAQ market capitalization more than 475 billion U.S. dollars. And in recent years in Europe, Asia, South America and some countries have special laws for REITs to develop and promote the development of REITs. Japan, Korea, Singapore and other countries have been REITs listed on exchanges, like stocks and general trading. Judging from abroad, no REITs, there is no commercial real estate, more than 60% of the real estate investment is realized through REITs. However, the current domestic academic research on REITs is not yet in-depth, its formation mechanism, laws and regulations, and other aspects of the practical application of the lack of in-depth research. It is noteworthy that, in order to ease the real estate industry, the financial system, especially commercial banks constitute a potential financial risks, the People's Bank in January 2007 had first started research. Therefore, in the context of this reality, the system of China's current development status of Real Estate Investment Trusts and obstacles, to explore practical mode of operation and the path for reducing the risk of real estate finance and protect the financial system safety, and promote the health of the real estate industry development, not only has important theoretical significance, but also has a special practical significance. This use of modern financial theory on real estate investment trusts this new financing methods have defined the concept, by comparing the domestic and foreign real estate investment fund operation, learn from the United States and Asia advanced experience and on this basis put forward China's development real estate investment fund practical significance and countermeasures. Article is divided into three parts, the first part of the thesis Chapter REITs general theoretical analysis, introduces the concept of real estate investment trusts, classification and unique advantages, as the following analysis of the real estate investment fund established to provide theoretical support. The second part is the third chapter, introduced China's current situation and the obstacles to establishing REITs, through our two \barriers, market barriers, obstacles and other personnel for the back of targeted solutions and recommendations put forward direction. The third part of the thesis chapters IV and V, China's real estate investment trusts mode selection and policy recommendations. Study and learn from the United States and Asia's development experience and lessons, combined with the actual situation of China's current real estate trust products development model to make some reference route and start from the national macro-economic level, proposes to promote REITs in our development policy recommendations. The main innovation is based on existing regulations and policies define the connotation of real estate investment trusts, general theory is relatively clear, and learn from advanced international comparative experiences and lessons designed our framework for real estate investment trusts, real estate financing management provides an effective means. The main downside is that real estate investment trusts enough depth analysis of the actual operation, the setting of specific path while relatively strong subjectivity, whether it is reasonable remains to be proven.

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