Analysis Of Domestic And Foreign Listing Obstacles Of China’s Retail REITs

Due to the restrictions of the national policy on residential real estate development, China’s real estate is in a transition period at present, and real estate agents have to invest in commercial real estate development and holding. Real estate developers tend to hold steady rental source of retail real estate. Retail commercial real estate needs a large sum of investment in capital-intensive industry. Real estate capital turnover cycle is long and has slow recovery, though holders have a stable source of rent.Real Estate Investment Trusts (REITs) is widely used in real estate industry in many countries all over the world. It can break through the IPO financing restriction and as a means of financing, bring a steady flow of funds, endure less debt pressure and gain stronger ability of resisting risks. Small and medium investors can put limit investment into a large demand while they entrust money to the expert management team. REIT also is a good way to invest for the Pension Fund Investment due to the continued stability. REIT is appropriate for the requirements of retail real estate development.This article first gives comprehensive descriptions of relevant concepts. First of all it is the basic concept of REITs, REITs operation mode, and the advantages of REITs from three aspects, namely the perspective of investors, financiers, and government using comparative analysis method summary outlines. Then I describe the concept of retail real estate. Through this part of the research, we can get a more objective understanding about the concepts and their connotations.Next part is China’s real estate financing situation analysis, including the China real estate financing policy, financing channels, and the present three forms of trust financing. This part emphasizes on the need for the use of REITs in China’s retail real estate.The third part is analysis of the obstacles encountered in retail real estate REITs, including the analysis of foreign REITs and REITs in the Mainland. The foreign part including two cases:analysis of a successful case Yuexiu and an unsuccessful case Wanda, and then I analyze the difference between Yuexiu and Wanda in order to probe into the failure reasons of Wanda. The mainland part has no ready-made case, so I analyze tax incentives constraints firstly, and then from three perspectives I analyze the factors restricting development of China’s domestic retail REITs.Finally, the last part gives several development proposals for retail REITs and then summarizes the outlook of it.