Development Of China Real Estate Investment Trusts Discussed

As an innovation form of real estate finance, Real Estate Investment Trust ( REITs) offers a new financing channel for real estate developers by raising money from capital market instead of from banks. Moreover, REITs offers a kind of profitable and safe security for scale investors, who were restricted from real estate industry due to the high capital entry level.This paper analyzes rapid developed overseas REITs market and compares their legislation, trying to get some tips for Chinese REITs establish.1,In U.S.A. REITs research, driver for this mature market is tax preferential system. Based on this, a special structure and strategy was established for REITs, and improved several times in the past decades.2,Other countries and regions set up their own REITs system after learning from American. This paper also analyzes and compares their varieties.3,IPO return of REITs was much lower than other stocks. According to the historical performance of REITs in U.S.A, REITs is a kind of profitable and safe security financing products. Higher requirement for dividend makes it with good yield; on the other hand, real estate industry makes it relatively stable development.4,There are three Chinese mainland real estate companies successfully published their cross border REITs in Singapore and Hong Kong Special Administrative Region of the People's Republic of China. The creative organization structure and tax process are analyzed, as well as finance risk.5,It must be a trend to develop REITs market in China mainland, which helps to release the loan pressure and risk from commercial bank; In the mean time, reduce the chance of capital outflow through cross border REITs. Finally, barriers and opportunities are both given by applying the successful experience of above researches.