Risks And Pricing Of China's Rental Housing REITs

The China Securities Regulatory Commission and the Ministry of Housing and Urban-Rural Development jointly issued the "Notice on Promoting the Securitization of Residential Leasing Assets","will focus on supporting housing leasing companies to issue equity-based securitization products with their real estate as the underlying assets.Pilot-issued real estate investment trusts(REITs).The development of China's housing leasing REITs is still in its infancy.In order to explore a more complete housing leasing REITs development mechanism to promote the development of the housing leasing market,this paper analyzes the risks and pricing of housing leasing REITs.First of all,this paper analyzes the market conditions of China's REITs,and compares the management structure and legal taxation policies of China's REITs with foreign countries.Then,this paper analyzes the main risk points of China's housing lease REITs and proposes countermeasures.Then,based on the data of first-line and new-tier cities,this paper establishes a pricing model for housing rental REITs based on Monte Carlo simulation algorithm.Then,this paper applies the housing leasing REITs pricing model studied to the case of "Zhonglian Qianhai Open Source-Poly Real Estate Leasing Housing No.1 Asset Support Special Plan".The study found that if the standards of mature REITs are adopted(ie by REITs themselves)The proceeds are redeemed,and the original equity is fully risk-isolated.The original equity does not provide the difference and guarantee.The "Poly No.1" housing lease REITs will have a probability of 63.83% and will not be able to pay all the priority interest on time.And the principal,which constitutes a breach of contract,which shows that the current pricing of "Poly No.1" REITs is not reasonable.In addition,this paper also uses Monte Carlo simulation algorithm to evaluate the value of property assets at the time of expiration of REITs.It is found that the probability of property assets has a probability of 76.16% above the initial evaluation value,and there is a certain risk of falling prices,which can not repay the investor's principal in time..The reasons for this are as follows: First,China's current taxation on housing lease REITs is too high.For example,"Poly No.1" REITs account for 37.13% of the tax revenues;second,the lack of relevant laws has limited the choice of basic assets.The effective basic asset portfolio cannot be carried out;the third is that the low level of management of the domestic REITs team leads to low capital assets.Finally,this paper summarizes and solves the problems discovered by the research.Through the comparative research at home and abroad,this paper proposes to improve the legal tax system,use the shareholders' borrowing to reduce the tax burden,improve the information disclosure system,improve the professional ability of the management team,and optimize.Suggestions such as hierarchical structure design provide ideas for policy and product design for the development of housing leasing REITs in China.