Study On The Introduction Of REITs Mode To Protect Housing Finance

The State Council put forward in "Twelfth Five Year Plan" that social securityhousing coverage should increase from7%to20%in2015. But statistics showedthe progress has been slow. One of the the most serious reason is the shortage ofsocial security housing capital. REITs, as a new financial tool, reduces investmentthreshold of investors in real estate from a certain extent. It increase real estateenterprises liquidity and keep the project cash flow stability. REITS is a majorinnovation in the financial industry in the field of real estate development.American, Hongkong and other places have introduced very mature developmentof REITs system into the protection of social security housing construction forfinancing social security housing.But its development in mainland is very slowly.In October2009, Beijing, Tianjin, Shanghai became the first pilot city of ChineseREITs. The first REITs product in Tianjin is Tianjin low-income housing projects.With the development of REITs pilot city, REITs combined with the construction ofsocial security housing is developing rapidly. We need to develop REITs modethat fits our own situation. Therefore, on the basis of REITs developmentexperience of other countries, We should develop the most suitable mode forChinese social security housing REITs and promote the development of Chinesesocial security housing REITs to solve the financing problems of social securityhousing construction.Through literature analysis, historical study, the social security housingREITs analysis case analysis I came out the following results:First, I described the classification of the various social security housing andREITs. In order to alleviate the financial pressure of the government, the REITsasset pool can contain non-social security housing, such as office buildings,garage and other commercial facilities. Those facilities with high rate of return canimprove the REITs project guarantee basic income.Second, through analyzing the characteristic of REITs and the development of thesituation in Chinese, I explore Chinese social security housing REITs operationmode should raise funds through public offering mode, take the contract typeorganization and the investment direction should toward to equity REITs. Throughthe analysis of social security housing REITs participants and profit model, Iconcluded the initial construction of REITs financing mode based on the socialsecurity housing.Third, The paper put forward reasonable suggestions to guarantee the socialsecurity housing development of REITs. I summarized various risk of socialsecurity housing in the construction of REITs and then suggest the proposedimprovement measures.