The Risk Government On Our Commercial Real Estate REITs

Real estate industry is related to the important industry of national economydevelopment and social stability, with the process of urbanization and industrializationis speeding up increasingly and the change of consumption structure, the proportion ofcommercial real estate in the real estate industry gradually increased. The commercialreal estate has the characteristic of large funds, long period, it belong to the typicalcapital denseness industries, but their financing channels singles for a long time, funswere mainly financed by bank loans, once the credit policy regulation, it will bring greattreat for the whole system of the commercial real estate and serious financial risk to thesociety.There is an urgent need to open up the financing channels to develop newsources of funding. Real estate investment trusts (REITs) is a relatively mature specialcollective investment system around the world in development of the real estate market.It can not only to raise funds to invest in the real estate industry,and satisfy the demandfor funds real estate industry, it can also spread the excessive dependence on bank’s realestate industry in our country, the development of commercial real estate REITs will bethe inevitable trend.This paper introduces the concept and characteristics of the commercial real estate.REITs system concept, types, components, operation mode and system advantage.Analyses the development of commercial real estate REITs in China current situationand existing problems. REITs as a kind of new real estate financing tool, we confirm itsadvantages and cannot afford to ignore their risks at the same time. For effectiveanalysis of commercial real estate REITs risk and governance which can help thehealthy development of it in China. The paper systematic analysis the commercial realestate investment risk, operational risk and social risk of commercial real estate REITs risk. Focuses on the principal-agent risk of social risk, establishes principal-agent model.The study shows that the supervisory role of the custodian is very important; changingthe Managed income payment can strengthen the supervision of the custodian.In order to reasonable and effective manage the risk of commercial real estateREITs, it need to promote the benign development, the paper proceed from theperspective of social technology, proposed a effective governance for the commercialreal estate REITs investment risk, operational risk and social risk. The Investment riskmanagement need to base on the measures of the reasonable positioning, optimizationof investment decision-making, interest rate hedging strategies, improving laws and riskearly warning. The operational risk management needs to set a financial supervisionsystem, improve the level of operational management and ability of Board of Directorsdecision-making, and professionals Training. The social risk management needs tointroduce a beneficiaries meeting system, improve the organizational structure,strengthen the information disclosure system, incentive mechanism and supervisionsystem and credit system construction and so on.