The Financial Structure Optimization And Financing Approaches Comparison Of Real Estate Development Enterprises

As the backbone of national economy, the industry of real estate requires considerable investment. So, financings hold the balance on Real Estate businesses. Recently, the capital resources of most real estate developers in China are mainly from bank credit. Their financing structures are comparatively simple and are easily influenced by the macroeconomic polices and economy environment. After the NO. 121 Document and a series policy of Central Bank was issued, the stringency policy of Central Bank put more than half of Chinese real estate companies in danger of capital lack, or even being washed out from the market. Conventional financing methods are not able to satisfy the capital requirements of recent real estate development. Nowadays, real estate companies had not depended on bank loans as its only financing approaches. In real practice, they had turned to other new financing approaches such as stock market financing, overseas financing, enterprise bond, shares right financing, and REITs and so on.The article analyzes the financing problems on the foot of real estate companies. Through analyzing the characteristics of real estate financing in china today and comparing the advantages and disadvantages, cost and risk of financing approaches, this research approves the government, financing organizations, real estate enterprises, and agent companies to make effort to exploit more ways to finance and improve the proportion of direct finance.Since the capital markets are not perfect in china today, the real estate enterprises with different scope have a great difference in choosing financing approaches. On the base of analyzing the characteristics of every financing approach, together with themodern capital structure theory-MM theory, the article studies the finance schemeoptimization methods of the real estate enterprises on the stock market by combining with qualitative analysis and quantitative analysis, and provides a practical method torealize the optimization structure of capital-the lowest WACC and highest marketvalue. The article also researches the finance decision of intermediate and small real estate enterprises using the Analytic Hierarchy Process. To sum up, the paper offered effective point of view, train of thought and method for real estate enterprises to make financing decisions and realize financial structure optimization.