Analysis On The Application Of REITs In The Financing Of Long Rent Apartments

Against the backdrop of continuous improvement in China’s urbanization rate,the demand for urban housing in China is constantly increasing.A large number of migrant workers have flooded into economically developed first and second tier cities.Given the high housing prices in these cities,people are turning to renting housing.The country has also introduced many policies at the macro level to support the development of the housing rental market.In recent years,longterm rental apartments have begun to rise,providing a better living experience and better property services in cities,and are deeply loved by some young people.At present,the floating population and college graduates in China are increasing year by year,providing a broad market demand for long-term rental apartments.However,long-term rental apartment enterprises in China are generally facing some financing difficulties,unable to withstand the huge initial investment and daily operational financial pressure of long-term rental apartments.Long term rental apartment companies need to expand new financing methods.The main body first introduces the background of the issuance of Poly’s REITs,defines the concepts of REITs and long-term apartments,introduces the market situation and financing methods of long-term apartments in China,and then introduces the case of Poly’s REITs development,including the basic situation,transaction structure,main related parties,etc.In the case analysis section,the operational design of Poly’s REITs issuance is analyzed,Through analysis,it was found that the issuance of Poly REITs has a positive response in the capital market.From a financial perspective,REITs can broaden financing channels,stabilize the cash flow of enterprises,reduce financial risks,and analyze their social benefits.Finally,the problems of Poly REITs were pointed out,including incomplete legal systems,high transaction taxes,excessive reliance on subject credit,and operational risks.Finally,based on the previous case analysis,a summary was made on the financing and application of Poly REITs.It was found that REITs have the advantages of meeting the capital needs of enterprises,low financing costs,and meeting the needs of investors.In response to some of the problems existing in Poly REITs,suggestions were proposed,such as improving the construction of relevant legal systems,providing tax preferential support,optimizing underlying assets,and optimizing transaction structures Suggestions for promoting public offering and listing in the later stage of the special plan.This article analyzes the case of Poly Development’s rental housing REITs and finds that REITs can assist long-term apartment companies in financing,thereby raising funds to develop long-term rental businesses.Poly Development’s rental housing REITs can also provide experience and reference for other companies to issue rental housing REITs.