Case Study Of X Trust Company Real Estate Collective Funds Program

The real estate industry of China is an industry with active trading,diverse forms and high returns,and its healthy development will also contribute to the real economy and financial markets.In recent years,considering of financial systemic risks and over-investment as well as speculation in the real estate industry,the government and the China Banking Regulatory Commission have jointly tightened the banking financing channels of the real estate industry,after bank loans,private financing,refinancing,and domestic and foreign bond issuance had been standardized.This further exacerbates the imbalance between supply and demand of funds in the real estate market.Trust financing,especially the “active management class collective fund trust plan” played a role.However,based on the short development of business,the high degree of homogenization of business models,the lack of funds supervision measures,and the imperfect regulations,Chinese real estate collective fund trust plan has many practical problems compared with the mature real estate.There are three major obstacles in trust investment funds(REITs):(1)The capital market is immature,and the investors lack understanding and trust in the domestic “REITs”,which makes the investment model of real estate trust hard to IPO.Thus lacking of liquidity and exit channels;(2)Trust company's asset management capabilities are insufficient,business model is single,risk awareness is weak,too much emphasis had been paid on short-term gains,and long-term sustainable development had been neglected,leading to many real estate trust plan problems in program design,fund raising,fund supervision and safe exit,business risks are high but benefits are low.(3)The restrictions of the policy environment and the introduction of a series of new policies and regulations have marked the “big capital management”.The arrival of the "big trust" era,in the policy restrictions plus.Under the situation that the code and the competition in the same industry are intensifying,the domestic real estate industry is deeply mired in the dilemma of “throttle” and “open source”,and the trust industry needs time and practical experience to discover and solve problems in the business and realize transformation.So analyzing the advantages and problems in the business development of the real estate collective fund trust plan,targeted reference and improvement,will help the trust company to optimize its business and strengthen its asset management capabilities as well as improve the efficiency of real estate corporate trust financing.Based on the case of the X Trust's real estate collective fund trust plan for financing A real estate project company,this paper adopts financial analysis method,field investigation method,literature research method,etc.,analyzing the real estate collective fund trust based on the business plan of the trust plan.The plan design and participation before the planned financing business,and the analysis of the project construction after the development of the real estate collective fund trust plan,the project fund supervision,the source of repayment,the financial ability of the financier and the guarantor,etc.The real estate collective fund trust plan has reference and potential problems in object screening,fund supervision,risk isolation,profit and loss situation and exit route.The study found that the current real estate trust financing has problems such as lacking of trust fund supervision measures,incomplete business compliance review,lacking of risk isolation mechanism between projects,and single channel of trust funds withdrawal,which leads to trustee management.Risks such as financial risks,and trust shadow banking risks will hinder the development of Chinese real estate trust financing business,and it is also not conducive to the development of real estate enterprises.Therefore,this article proposes some improvement glimpses,including but not limited to the establishment of the lowest scoring standard in the trust industry,grading the trust business,actively monitoring the trust funds,dynamically controlling the source of repayment,enriching the assets of the trust business,and establishing inter-risk isolation mechanism,innovative trust public financing model,etc.I hope this case study can provide some practical experience for the future business innovation and industry transformation of the trust industry,helping promote the trust industry to become a mature asset management industry,further strengthen the trust company's business functions and asset management strength as well as promoting the development of Chinese REITs.It also provides safer and more effective trust financing channels for the real estate market.