Case Study Of CYPA REITs Financing Model And Operational Risk

In recent years,under the "two-wheel drive" of strong market demand and country's policy supports,various real estate enterprises have accelerated into the housing rental market,and China's long-term rental apartment market has developed rapidly.However,there are many problems in long-Rent apartments,such as large investment,high operating cost,low rent return,slow fund withdrawal,etc.Particularly,difficult financing,scarce financing channels and lack of reasonable exit mechanism have greatly limited the scale of long-term rental apartments.REITs(ie,real estate investment trusts),as a product of asset securitization,have a positive effect on solving the problem of excessive reliance on bank loans,scarce financing channels,and broadening financing channels.China has begun to try the financing model of“REITs+Housing Lease” to realize the closed-loop value of long-rental apartment asset management.However,given that China's REITs are still in the initial stage,the financing model of REITs needs to be further explored.This paper selects the domestic first-class equity apartment-type REITs--"Special Plan for Supporting the Equity-based Housing Trust Assets of the CYPA",and adopts the method of case analysis,combined with the practice of CYPA REITs,to deeply study the financing method of "REITs + long-term rental apartment".Through the analysis of the closed-loop assets management value of the CYPA,this paper sorts out the overall operation mode of the CYPA REITs,and discusses the specific operational risks of the special plan from five aspects: income fluctuations risk,transaction structure risk,assessment asset value risk,property operator's continuous operation and cash flow replenishment capability risk,refinancing risk.It is expected to provide a solution to the closed-loop asset management value in the long-term apartment area.The findings of this research are as follows:(1)The development of REITs financing model for long-term rental apartments in China needs to be selected according to the current environment and the development of long-term rental apartments.In general,contractual,closed,private,and equity type of REITs should be selected;in terms of management mode,the combination of internal and external should be chosen;in terms of credit guarantee,the combination of internal and external credit enhancement measures can improve the safety of products;as for the transaction structure,the framework of “contractual private equity fund + special asset management plan” can be adopted to realize the risk isolation.Although the CYPA REITs have set agood example,there are still some shortcomings.The overall financing scale is relatively small.The storage shelf issuance mechanism is not adopted,and the assets under the target are greatly affected.The public offering of REITs has not yet been realized,the investor threshold is high.(2)The financing mode of “REITs+Housing Lease” integrate multiple risks in the real estate market and capital markets.From the practical operation of the CYPA REITs financing model,risks faced by the CYPA REITs are mainly operating income fluctuations risk,transaction structure risk,assessment asset value risk,property operator's continuous operation and cash flow replenishment capability risk,refinancing risk.In view of the above risks,from the perspective of investment,we should choose property with clear property rights,and actively manage assets to ensure a sustained and stable cash flow of the property.From the perspective of management,priority should be given to the cultivation of talents,and the risks should be studied from a professional view.At the same time,an effective internal supervision system and risk management system should be established.Moreover,from the perspective of government,the corresponding policies,laws and regulations should be improved based on China's national realities to achieve the public offering of REITs.