China's Development Of Real Estate Investment Trusts (reits), The Necessity And Feasibility Analysis

Real estate industry has been an important component of the national economy recently. It's a industry highly depended on finance also. In recent years, the issue whether real estate industry has overheated has been the focus of disputation .The proponent and the opponent both put forward sufficient arguments, which backed their views separately. But this paper have found that there's some bubble in the real estate market, after making objective analyses.It was in 1960's that Real Estate Investment Trusts developed rapidly in America. And there is sizable scale after more than 40 years development. In the course, Real Estate Investment Trusts not only provide enough fund to real estate economy in America, but also become good otherwise investment instrument which can improve yield. The object of this paper is the financial products innovation of real estate under the situation of China, referring to the advanced experiences of America. Because it can not only rich investment instruments of investors and improve their yield, but also can reduce the risks of real estate industry, financial and macro economy system risk through developing Real Estate Investment Trusts appropriately.In the whole, the paper can fell to three parts:The first part is: The scale and speed of American REITs's development has been the leader of global market, according to the global development of REITs. So this part stresses the course and experience of American REITs's development. At the same time, I also carried on general contrast analysis of its advantages and disadvantages as an investment instrument.The second part discusses the necessary of the development of REITs in China. Base on the fact that our country's credit system is undeveloped, the introduction of REITs can reduce the speculativeness of participator of real estate market, and restrain the high vacancy rate and foam of real estate market. At the same time, it also can complement the credit channel on the primary market, and disperseconcentrate risk of the banking system.The third part analyzed the feasibility of REITs in China, according to the contrast of different investment mode and statutory structure. After contrast between Equity REITs and Mortgage REITs, between investment trust REITs, company REITs and fund REITs, the paper insisted that we should initiate Equity, contractual fund REITs firstly under our country's present situation,which is Equity,contractual Listed Property Fund(LPF).