The Research Of The Value Of REITs And Its Outlook In China

REITs (Real Estate Investment Trusts), is a real estate financing resourceand an investment tool, which has become a mature and popular investmentproduct in overseas markets such as the U.S., UK, Australia, France, Japan,Singapore, Hong Kong, etc. The Public REITs traded in the open market isthe mainstream type of REITs. At the same time, REITs’ development inChina is in a relatively long period of ambiguous rhythm. This paper startsfrom the basic attributes of REITs and historical performance, combined withChina’s actual financial and real estate market conditions, and discusses theexact value of REITs, whether it is really suitable for the Chinese market,while outlook REITs in China in its initial phase. In addition to theintroduction in Chapter I, the paper is divided into five chapters, the logicalstructure is a progressive layer of relationships, and Chapter III, IV and V arecrucial across the paper.Amongst, Chapter II describes and makes statistics analysis of US and global REITs markets. This chapter is divided into three sections. Section1briefly reviews the step-by-step development of REITs originated in1960.Section2focuses on the U.S. market, a market accumulates over600millionAUM in scale and the number of new REITs to market is around200peryear. Two-digit annual yield is also amazing and varieties on the depth, width,and breadth prove REITs amazing success in the United States. Section3is abrief introduction of REITs in other countries worldwide replication anddevelopment.Chapter III is also divided into two sections. The first section focuses onthe attributes to make REITs successful. Historical data presents that thelong-term success of REITs is not accidental when several factors contributeto it including its securitization ability to create liquidity, collective financing,the advantage in long term risk adjusted return. The suitable environment isalso the key to its success. Section2analyzes the current domestic financialmarket and real estate market, and points out that the demand in the China’smarket and the significance of REITs, as well as its future potential.On this basis, Chapter IV Section1reviews the domestic assets of listedREITs cases overseas route through the pros and cons, and subsequentlyfocused on prospects of China’s REITs especially in preparation phase,including mechanism establishment, framework design, underlying asset orientation, tax and so on. All these factors are about how to learn fromoverseas experience to take the advantage of late-development, and suit tolocal conditions to optimize the model of domestic REITs.Chapter V is wrote in a deeper insight. Section1discusses the options ofChina’s REITs in its initial phase, also points out the timely introduction ofREITs is positive to promote public housing as well as the healthy housingmarket, reducing the level of government debt, widened the real estateinvestment channels. Section2examples public rental housing by trackingdown the offshore real trade data in the similar types of REITs, combinedwith our present economic situation, analyzing the reasonable pricing ofpublic rental REITs. I hope it’s favorable to create China’s own REITsproduct.Chapter VI reaches the conclusions in the value of REITs in China andthe outlook of the initial phase.