Case Study On Risk Management Of Real Estate Trusts In China

In recently years, with the continued macro-control to the real estate from thegovernment, more and more real estate enterprises through the issue of Real EstateInvestment Trusts(REITs) products for financing, which has become an importantway to undue the reliance on bank loans. With the rapid growth of the number ofREITs products, risk analysis and risk control of REITs is being paid more and moreattention. It has great significance for Trust company and investors to research the riskand risk control in REITs.On the basis of domestic and foreign literature review on REITs research, Firstly,the author introduce the case which the author participated in Chang’an trustinvestment company. Secondly, according to the general process of risk management,the author classificate and analysis the main risk factors in this case.The mostimportant risk actor to the case is the market risk, and sensitivity analysis indicatesthat the case has high resistance ability to the market price changes. Once again, theauthor finds that the case ignored the folk debit, and a possible flaw in the landmortgage and guarantee measures, in the sanme time,there is no perfect risk treatmentplan. Therefore, the author puts forward corresponding countermeasures. Finally,based on the case analysis, we will give some suggestions to the development ofREITs of China. The suggestions include: focus on the key risk factors in differentstages, implement the risk management strategies of REITs, improve the detail of riskmanagement of REITs.