Research On The Risk Management Of Real Estate Investment Trusts

In the recent years, Chinese real estate industry has been in trouble with financing. On the other hand, the huge civilian capital contained in the nation is short of High performance investment channel. As an efficient way which can solve both of the problems, REITs' raising will be the inevitable trend of the development of domestic real estate industry and capital market. Therefore, ample research on the REITs is really important to Chinese finance.Referring to financial instrument, risk management is always the determinant to its return. And regarding as an real estate securitization product, the risk facts involved in REITs are more special and complex. So its risk management could never be replaced of the general investment funds' risk management system. This paper just try to discuss the issue of the risk management of the REITs, which is lack of systematic research but significant, hoping to contribute to domestic REITs study. The paper dissertates the issue step by step. The central part will be divided into four chapters:Chapter 2 " REITs summarization", introducing from three aspects: firstly, define the REITs' conception and category; Next, analyze the difference between REITs and stock, bond, MBS and security investment funds, as well as address REITs' unique advantage and insufficiency; Finally, introduce the status quo of global REITs' development.Chapter 3 "Identification and evaluation of the REITs' risk", classifying REITs' risk facts according to its characteristic. And quantitatively analyze the vital ones with mathematics model. One hand, REITs encounters double risk arisen from real estate industry and capital market. On the other hand, REITs also suffers lots of hidden troubles from the operation of funds. Consequently, the paper classifies the REITs's risk into investment risk and operation risk. In addition, investment risk includes market risk, liquidity risk, size risk, while operation risk involves client-agent risk, manage risk and financial risk.Chapter 4 "The control system of REITs' investment risk", aiming at its investment risk facts, explore to establish the mechanism of the REITs' investment decision-making, and the way to implement the REITs' investment risk management. Although most of the REITs' investment risk facts exist objectly, yet we can evade them or control the damaged degree by means of various methods and technique, such...