Study Of Commercial Real Estate Development Financing

Chinese real estate industry enters the commercial real estate period at the threshold of 21st century. With the development of commercial real estate, it tends to be more essential to our society and our daily life as well. But there are still many financing problems in the development process along with the rapid expansion of commercial real estate market. The government managements on the loan control and land exploitation rights became more strictly under the tighter macro regulation. Therefore, it brings forward much intense challenge for the developer to finance the commercial real estate development. The old exploitable mode such as " land gaining-loan -sale " must be changed on the basis of sufficient utility of existent financing methods. Development and operation should be integrated. Then the abuse of bank loan on the financing of commercial real estate project will be improved. Thus, the micro part of investment and development will get more Rinds which reduce the investment risk and increase the probability of success. Furthermore, the ineffective loans in bank will decrease obviously and the sufficient supplies of commercial facilities will fulfill the demand of high quality of living standards. One of innovations on financing modes of commercial real estate development is to introduce project finance which adds new partners, such as retailers and investors, to the development financing activities. The contradiction between large repaying pressure in the short run and leasing benefits in the long run can be solved by matching the income of investment with the risk of each partner involved.This thesis falls into five chapters.The first part analyzes the concepts of commercial real estate, investment real estate and beneficial real estate as well. Then a series of new concepts are brought forward through construing the different definitions. Then comes the summary of the characteristics of commercial real estate on development, operation andfinancing.The second part introduces the background and the actual condition of the development of commercial real estate in China. It analyses the problems on financing process and the importance of researching on this problem.The third part makes a deep study on the different sorts of current financing channels.The forth part introduces the concept of project finance into development financing of commercial real estate. On the basis of analyzing the characteristics of project finance on commercial real estate and their cooperators, two project finance modes are designed. And comment is also made on the practicability of their usage.The last part focuses on the importance of government controls on the development financing of commercial real estate. The content and purpose of different controlling means are also discussed.