Risk Management Research On REITs Financing Mode In Senior Real Estate

At present,China is facing with the severe population aging situation which has the feature of developing fast.Thus it brings the growing and diversified demand on the senior residential and the corresponding senior service,the senior housing real estate in our country has good prospects for development.However,the providing style for the aged is single,the senior real estate projects suffered from financing difficulties and characterized by narrow financing channels,which hinder the development of the Chinese aged care industry.At present China is still in the initial stage of senior real estate industry,the market positioning and customer segmentation is not clear,the corresponding product chain is not complete.Although the senior industry is gradually combined the senior health care,leisure and entertainment into one part,the contradiction between large-scale fund supplies and the single financing channel is still hamper the development of senior real estate.Real Estate Investment Trusts(Real Estate Investment Trusts referred as REITs)is a new financial instrument,it plays an active role in solving the over-reliance on bank loans,relieving banks of the financial pressure,and expanding investment channels.Senior real estate is different from commercial and residential real estate,because the investment recovery period is longer and it has the social welfare nature.Bank loans and private funds could not cover the development funds.Therefore,to a certain extent,the application of REITs could promote the development of senior real estate.The senior real estate REITs mode would have more participants,so an elaborate analysis is quite necessary due to the potential risks.So the REITs model can be used in the Chinese senior real estate projects to promote its regular development.This paper employs the qualitative analysis and quantitative calculation,then by applying theoretical research combining with empirical analysis,the feasibility and necessity of China's senior real estate REITs was investigated.The risk management process of senior residential REITs mode was built by analyzing the risk identification,assessment and sharing.The risk factors can be presented as statistical data by Delphi Method.Based on the grey fuzzy comprehensive evaluation method,the financial risks of REITs mode can got a scientific and quantitative assessment.Finally the grey fuzzy evaluation matrix is set up,the application of AHP method and entropy method can determine the weights of various risk indicators,then identified the project's risk level.At last,under the specific circumstances of the case,it should consider the high risk factors in order to propose effective solutions and put forward the financing risk sharing scheme of senior real estate REITs mode.It can be seen from the analysis,the management risk,market risk and policy risk are the most prominent risks of senior real estate REITs mode.In terms of risk sharing,fund managers,developers and investors should all bear these risks.For the country,it should improve the laws and regulations,enforce the implementation of supervision system so as to regulate the senior real estate REITs market.