Research On The Financing Pricing Of Long-term Rental Apartment REITS

With the deepen of Chinese urbanization and the encouragement of the government,long-term rental apartments develop gradually these years.But the development of long-term rental apartments is limited because of narrow financing channel,higher financing cost and long payback period.The coming of REITS offers a new way for long-term rental apartment to financing.On Jun 25~thh of 2018,China's first equity REITS that is issued by reserve price by a private enterprise,Xuhui Lingyu REITS achieved public offering in Shanghai Stock Exchange.The successful launch of this kind asset back security promotes the innovation of Real Estate Securitization and it also set a good example on how to revitalize stock apartments.This paper takes Xuhui Lingyu REITS for example combined by Monte Carlo simulation to establish a model for the net cash flow of the underlying asset.,Then I set a probability distribution for each uncertain variable,on the basis of the this,we can predict the net cash flow of the following years.We also done some pressure tests to prevent the credit risk.In terms of Xuhui Lingyu REITS,we analyze the potential risk and also offer some solutions.Besides,we also make Valuations of two priority asset-backed securitiesThrough the study,we can find that Cash flow from Xuhui Lingyu REITS can coverage the interest of its priority-supporting securities,so it guaranteed the safety of this product.REITS helps revitalize rental income,and the Valuation Results is very close to the Par value,so the exist of REITS did offer a new way for long-term rental industry to financing money.The industry of long-term apartments is still on the initial stage of development,No matter the environment of policy or legal or the development patterns,operating ways all need to be improved constantly.There are also some insufficient of this paper.Because this plan is launched by private offering,so we don't have access to some reference data or information.And this brought some difficulties on our research,impact the comprehensiveness of this research.Besides,the research result of this paper is untested,it need to be verified on future studies.And the limited time and research level of myself also cause the study is not exhaustive.