Chinese Real Estate Development And Private Equity Financing Model Study

The real estate industry is a special industry, comparing with other industries. It has its own characteristics, like higher investment, higher returns and higher risks; it can strongly drive the macro-economy development. And it is a very important supporting industry, which relates to the national policy and people's livelihood and pulls to move the economy growth and improves residents' living condition. On the other hand, the real estate industry is a capital-intensive industry either, and its development is inseparable with the support of financial industry. The two industries interact with each other and rely on each other.For a long time ago, the main capital resource of the real estate enterprises is the bank loan, while enterprises themselves input a small part of capital, and the real estate financial system structure is simplex. As a result of lacking the mechanism of risk-sharing, overwhelming major risks of the real estate financing are all concentrated in the banking system. After 2003, State Departments and Central Bank enacted a series of financial policy to the real estate financing. So each bank has been more cautious of their real estate development loan. As a result, the financing channels become narrower.This paper, taking broadening financing channels of the real estate enterprises as the research focus, financial innovation as to the guideline, related theories of the real estate financing as the foundation, combining with the present circumstance of real estate industry, through analyzing Chinese real estate industry and its relative industries development actuality and existing problems, puts forward a new financing channel for Chinese real estate enterprise - private equity financing. This paper details the information model of private equity financing, and layouts a general operate model of private equity financing for real estate enterprises. Last, this paper analyzes the points the real estate enterprises should focus on when they plan to set up a private equity real estate fund as the general partner.