The Analysis Of Real Estate Finance Development And Methods For Real Estate Companies

Since the beginning of2010, the Central Government of the PRC has launched aseries of macro-control policy towards the property market which is being regarded asthe most restrictive in the history by the property players, including the homepurchase restriction and the tightening of credit towards property developers. Allthese not only affect the development of the PRC developers but also affect theirfunding and cash-flow position. This leads to funding pressure to raise capital by thedevelopers. However, even though it is the time which PRC developers requirefunding most to solve the shortfall in cash-flow, the tightening of credit has limitedPRC developers’ access of bank borrowings, which they previously rely heavily astheir primary funding source. And because of previous focus on bank borrowing,PRC developers historically paid little attention on other real estate financingchannels. In addition, because the development progress of other real estate financingchannels in the PRC is still far behind that of developed countries such as US andSingapore, therefore leading to the difficult dilemma faced by the PRC developers infund raising today. Therefore, it is very important for the PRC developers tounderstand the importance of real estate finance towards their business developmentand get to know how to develop their own real estate financing channels.This thesis is written from the point of view of property developers, starting withunderstanding the current macro-control policy and how it affects the propertydevelopers. And then there will be a brief introduction on the idea of real estatefinancing and what it means and why it is important towards developers. After that,through analyzing several cases on leading developers in US, Singapore and the PRC,this thesis hopes to give some insights to the developers on real estate finance,especially through the case study or a PRC listed developer and a offshore listeddevelopers, to demonstrate that applying real estate financing strategy is notsomething impossible, but something requires determination in execution,well-planning of overall strategy and action plan. Finally, through listing out some ofthe ideas on real estate financing strategy and execution plan, I aim to provide somepreliminary ideas on how to implement real estate financing. Real estate financing not only affect the development of PRC developers buttheir survival, therefore it is most essential today for them to under how to implementreal estate financing strategy.