REITs And Its Feasibility For Financing China’s Public Rental Housing Construction

China is under rapid urbanization, at which stage the lack of urban housing becomes a serious issue. China’s current affordable housing system include capped-price housing, affordable housing, public rental housing and low-rent housing, of which public rental housing makes up a large proportion. The large scale, long operating period and low rate of return on investment determines that the only way to finance public rental housing is government finance at the current stage. This paper sets out to find new ways to finance the construction of public rental housing.This paper proposes to use REITs as a new way for financing the the construction of public rental housing and analyses its feasibility.First of all, this paper gives a general introduction of the affordable housing system, introducing the basic features of public rental housing, the differences between different types of affordable housing, the pricing mechanism and exit method of public rental housing. The paper also gives a forecast of the demand for public rental housing for the next few years.Then, this paper introduces REITs, including its basic features, its difference from other real estate related investment tools and different types of REITs.After that, this paper discusses the development of REITs in the United States, Hong Kong and Singapore, giving great details to REITs related regulation, numbers, asset allocation and the differences between REITs in these three regions.In the end, this paper discusses the market enviroment, legal basis and ROI of public rental housing REITs and finds that the market environment is mature enough, the legal foundation still needs solidification and under certain circumstances ROI can satisfy the minimum ROI requirement of investors. So it comes to the conclusion that public rental housing is basically feasible in China at the current stage.