Study Of Real Estate Investment Trusts (reits)

Under the conditions of the globalization and the quick development of theChinese economy, there appears to be a quickly-development tendency in theChinese real estate industry. Since the real estate industry is a fund-sensitiveindustry, the tendency of the industry call for the financial innovation in the Chinesereal estate industry. Recently, a tool of the financial innovation in the real estateindustry called "REITs"(the abbreviation of the Real Estate Investment Trusts) hasbeen quickly developed worldwide, and attracted the attentions of the relativeexperts in the industry. According to the authoritative forecast, REITs will be one ofthe most important innovations of our country during the 21st century. We can comprehend the REITs as a kind of trust, by which many investors'money, which will be leaved unused during one period, is gathered to set up aorganizations, whose main works is to invest money in the real estate, manage theseassets, and at the end of the investment, as the return of the money, the investorsshare the return of the investments in the real estate assets. There are many meanings for the development of the real estate industry,investors and financial system to currently promote REITs in our country. It cansupply new fund for realty enterprise. It can decrease management risk from banks.It can promote the competition among the realty enterprises. It can make resourcesallocated suitably. It can promote realty enterprises to enhance management level. Itcan provide a new investment choice for the capital from the public. It can improvethe liquidity of the realty assets. It is beneficial to make information from real estateindustry more transparent. It can improve financial system in our country. This article mainly includes three parts. In the first part, the author dissertatesthe basic theory about REITs, such as definition, characteristics, categories, andfunctions etc, explores the origination and evolution of REITs, and discusses somerelative economic and financial theory. In the second part, by exploring the practicalrun of REITs worldwide, the author researches the law of the development about thelaw regulations, framework, management style, the subject, object and supervisionof REITs in every country. Finally, the author analyzes the factors which can affectthe development of REITs in china, and make some conclusions about how todevelop REITs in china. The ninth chapter is the most important chapter in this article. In this chapter,the author mainly discusses about how to develop REITs in china. In the beginningof this chapter, the author makes a strategy for the development of REITs in china.Followingly, the author dissertates some concerns about REITs, which refer toinitiation mode, the subject and object of REITs, frameworks and management modeetc. Finally, The author gives some policy suggestions about how to develop REITsin china.