Research On The Pension Real Estate Financing Mode Based On REITs

As a pillar industry of the national economy，the real estate industry is a typicalcapital-intensive industries with the characteristics of having the amount of capitalinvestments and a long turnaround time of funds. For this reason, the development ofReal Estate needs to be supported by financial markets to some extent.With the development of economy, china has begun to enter the aging society. Asthe changing of the family views and the enforcement of the family planning policy, anincreasing number of the "Empty nest" families began to appear. What’s more, the oldwould demand an increasingly material and spiritual life because their economicstrength has been consolidated. Therefore, the demands for elderly housing isundoubtedly increasing. At the same time, the development of the pension real estatesalso resulted from a slow development of nursing home and the state supports on itspolicy. But the funding become an important constraint of the pension real estates’rapidly developments. The paper aims to put forward an “REITs Mode” that conformsto the demands for pension real estates financing, so as to resolve the issue of itsfunding, promote its development and meet the needs of social pension.For one thing, the paper introduces the basic theory of Pension Real Estate andcomes to the conclusion that the origin of its interest is the amount of capitalinvestments, a long turnaround time of funds and the holding operation on Pension RealEstate through the collections of material study.Additionally, we can see to it that theelderly are willing to accept the way of lease from the analysis of its market survey andfinancing conditions, it is also put forward higher requirements on its developer funds.Meanwhile the sources of funds in Pension Real Estate have a relatively narrow channel,and the bank is more and more cautious about the loan of Real EstateFor the problem of financing methods, we introduced into an innovative financialinstrument---“REITs” Mode.The paper introduced the conception, the development andthe classification of “REITs”. And it also analyze the feasibilities and the impendimentsof Chinese development. Finally, according to the foreign experience of “REITs”,andthe practical situations of Chinese Pension Real Estate and “REITs” development to putforward the “REITs” Mode. This paper has introduced the organization structure, the operating process, and provided a specific operating mode, and also has given asuggestion on the development of this mode.