The Research Of Real Estate Investment Trust (REITs) Based On The Condition Of Present Market

Recently, a tool of the financial innovation in the real estate industry called "REITs" (the abbreviation of the Real Estate Investment Trusts) has been quickly developed in Asia country. REITs has not only retained the high-yield character of the real estate investments, but also has enhanced the mobility of the real estate investment assets. REITs has offered a financing channel for the real estate industry's development, also offered a kind of investment products with stable income and low risk for investors. At present, it is time for the real estate enterprise to find other financing channel outside bank loan, but there is limited product for the enterprise to choose. On the policy front, in order to counter Assets Bubble Pressure, a series of tightening measures were promulgated or implemented on the heels of the earlier surge in real estate market. (Including Document No.171 in 2006,the circular 50 issued by Ministry of Commerce & SAFE on strengthening the administration of foreign investment on real estate). These policies may have a negative affect to direct finance for the whole real estate industry. This article is working on this background, analyzes the necessities and possibilities to establish REITs and also seeks and establishes a new pathway, which is suit for Chinese actual and proposes some practical suggestions.Besides the introduction, this expatiates on the background, researching aim and methods. The author put three questions: What is REITs, why we should develop REITs in China and how to do? These questions are connected with the four chapters of this article divides:Part one is the general introduction to REITs, including its definition, characteristics, advantages, and then based on the developing history of REITs in American and Asia countries, the author reached three operating modes that are the basic structure for further research.Part two deeply analysis the situation of the real estate industry, using the author's experience in the industry and a lot of latest data. In this part, the author also suggested that the REITs can satisfy five demands from the market and social aspect; it is also the proven of the necessities to establish REITs in our country.Part three analysis the current situation of market environment and the existing institutions real estate investment(trust) funds, existing problems, concludes possibilities to establish REITs and moreover put forward the develop model of REITs in China.The last part of this article talked about the Conclusion of this research. The author believes it is a matter of time to develop REITs in China; the government should have native REITs regulation by exploring the practical run of REITs worldwide, and choose the right time to put the new product into practice by accumulated professional management experience.