The Study On The Development Prospect Of REITs In China

Real estate is one of China’s pillar industries, it relies on capital intensively. Therefore, an effective solution addressing real estate financing problems could bring along a more promising future of the industry, and amore solid foundation for the national economy. The foremost problem confronting the industry nowa-days is the structural unbalance of financing, it appears in a way that bank loans stand for most part of real estate capital recourse, and other channels such as pub-lic offering, corporate bond, trust fund and oversea direct investment, which are commonly used in developed countries’ lag far behind. This situation not only constraint the development of Chinese real estate enterprises but also jeopardize the whole financial system. The purpose of this dissertation is to probe the ration-ality, feasibility and operable framework of settling the real estate financing prob-lems by using REITs.As a major form of real estate industry’s financing channel, Real Estate In-vestment Trust have developed over the years in the United States and some Asian countries, which promoted the healthy development of these countries’real estate market and financial market.In view of the current stage of China’s national con-ditions and Real Estate Investment Trusts’ own merits,relevant parties are calling strongly for the implement of REITs in China.The core of this paper includes six parts. Firstly, analyzing the problems of various financing channels from macroscopic and microscopic angle,forecasting the future influence factors from domestic and international vision, which leads to the conclusion that mechanic innovation is a must for real estate financing; Sec-ondly, introducing the current situation of the real estate trust of our country; Thirdly, comparing the United States Model with the Asian Model, and choosing a best scheme for our own REITs; fourthly, exploring the necessity in five aspects, and feasibility of REITs from political, economic, social, technological, environ-mental, and legal aspects; fifthly, collecting the data of trust companies in 2009 and classifies these companies by hierarchical cluster analysis; Finally, giving suggestions for the REITs’ localization.