Financing Framework Of Large Real Estate Projects

The development period of the real estate projects is long and the investments are inlarge demand. But now the developers can only gain the developing and constructingfunds from one unique channel, the loans provided by the commercial banks. Alongwith the general adjustments and administrations by the government, the financialpolicies will be adverse to the RE developers. More projects, such as villas, Golfcourses, hotels, are forbidden.Along with the developing of Chinese economics, large real estate projects (LREPs)would be the trend and the important part of the Chinese real estate industry. Thedevelopments and the programming of the cities will create more chances to developthe LREPs. That will cause the changes of this industry. Because of great needs ofdeveloping funds to invest, it is very important to the LREPs that how to financeadequate funds.Nowadays, real estate companies mainly gain the commercial loans from domesticbanks and the returns of the properties sold and presold. The resources of thedeveloping funds from the monetary trust, IPO (initial public offerings) and privatefinancing are limited and it is only a small proportion of the sources of the developingfunds. Every commercial bank all strengthens the attention of the loan risk and isstrict with the process of examining and approving loans. At the same time, thegovernment continuously generally adjusts and administers the real estate industry bystricter and stricter land policies and development regulations to standardize thisindustry and restrain the price rise of the residential. To develop the LREPs, the realestate corporations need greater financial ability and more financial channels thenbefore.When developing the LREPs, the corporations need not only consider the complexrelations between different property types (such as the residential, offices, hotels,shopping malls), but also make a reasonable developing order of them to design theoptimal financing framework. When researching the problems of the FinancingFramework of LREPs, the writer has paid much attention to the applications of theresearch in the practices. In the last chapter of this article, 3 cases about the designingof the financing framework are citied. Because these cases aren't gone deep into, theycan only used as supplements. The research job of the financial analysis andframework of the LREPs will be worked on.