Study On The Financing Of Y Group's Real Estate Investment Trusts (REITs)

The real estate industry is a typical capital-intensive industry which requiring huge capital investment throughout the process from land reservation to real estate development and sales.The financing problem of real estate enterprises is crucial to whether they can continue to lead a steady and healthy future.With the rapid development of China's real estate industry,the entire industry is increasingly demanding for funds.While the real estate industry depends too much on the financing methods of bank loans which is relatively simple since the development of the real estate market.In recent years,a series of real estate supervision and regulation policies have been tightened,making traditional financing sources unable to guarantee the company's funding needs.For the real estate industry,it is a difficult problem that how to take the right financing method which providing sufficient funds with enterprises,lowering the cost of capital,optimizing the capital structure and reducing debt risk.Therefore,the energetic exploration of new financing channels is in urgently need for real estate enterprises.Regarded as one of the important ways of asset securitization,the real estate investment trusts(REITs),which can effectively revitalize existing property assets and add asset liquidity,will become a significant way for the real estate industry to finance and diversify risks in the future.At the same time,this innovative financing method also actively responds to the policy orientation of de-leverage and destocking,which can be an essential tool to promote the sound development of the finance and the real estate industries.Therefore,it is of great significance for the research on the application of the real estate investment trusts(REITs)financing for real estate enterprises.This article takes one of greatest real estate enterprises in China,Y Group,as the target of case study.Firstly,this paper expounds the basic theory and general overview of the real estate investment trusts(REITs)financing.The basic theoretical part includes the overview,constituent elements,general process and theoretical basis of REITs financing.The current status of China's real estate investment trusts includes the necessity and feasibility of implementing real estate investment trusts in China,and overall status of real estate investment trusts.The elaboration of these two parts laid the theoretical and industry background for the research.In addition,this article analyzes Y Group's financing status and the application process of implementing REITs financing,as well as deeply analyzes the effects of REITs financing,and then summarizes the success and shortcomings of this financing case.At last,it proposes some recommendations of conducting the real estate investment trusts financing for enterprises and regulatory department of government on this basis of previous researches.The research methods of this paper involve literature research,theoretical analysis,case study and financial index,which help to carry out the research on Y Group's real estate investment trusts financing.This paper proposes that the new financing method that can be used to solve the shortage of funds faced by Y Group and help to lead the road of diversified financing of Y Group,which has certain referential significance for resolving the financing predicament of real estate enterprises.