Research On Real Estate Investment Trusts In China

Essentially, Real Estate Investment Trusts (Shortened form REITs) is a sort of real estate generic collective investment scheme that is managed by professionals. It is a typical form of real estate securitization, which is a modern financial product innovation when the real estate industry and financial markets have improved and matured. REIT has played a dual role in the development of the real estate market and the capital market.REITs,as a mature financial innovation in real estate markets of countries in the world which has got great achievements, has attracted all stakeholders to take an active interest in China. Especially during the latest two years, it has raised the upsurge of researching on REITs at home, appearing so much voice of hoping for the coming of REITs as early as possible.But we also should see REITs is a functional financial innovation under the conditions of the particular economic development, the real estate market, financial system and the external market environment, also it is a financial innovation which the government indirectly promoted by legal means. Therefore, China should study and learn from foreign experience and the developments of REITs on the basis of lessons, with the reality of our country, to establish Chinese characteristic REITs legal norms, to promote the healthy and stable development of REITs.Ideas form the study, firstly this paper introduced the definition, characteristics, structure and performance on the basis of researching into the economics and finance theory and practice origin of REITs; Then this paper analyzed the status of REITs in China and the market environment and probed into the feasibility of REITs development in China. After that, combing the reality of our country, this paper analyzed the necessity of REITs'development in China from four directions: increasing financing channels, establishing a mechanism of sharing profit publicly, consummating capital market, changing circulative patterns of business buildings. Then chapter V discussed the path choice problem of REITs development in China. After comparing the strongpoint and shortcomings of real estate trust schemes pattern, real estate company pattern and close property fund pattern. This paper gave a development pattern, which is, making use of changing the existing real estate trust scheme products, to get close to standard REITs gradually. After that, this paper researched into principle-agent problems in REITs and gave suggestions to work out them. Then combing the latest case, the paper probed into the breakthrough of REITs development. Finally, chapter VI deeply analyzed the operational risks of REITs and constituted a risk control system in order to make the paper more integrated.