Financial Analysis Of Real Estate Investment Trusts

With the rapid development of China's economy and society and the increase of urban floating population,China's housing leasing market has entered a new stage of development.The traditional housing rental model has a poor rental experience due to information asymmetry and other reasons.At the same time,the long-rent apartment model,with its standardized housing and standardized lease contracts,has improved the rental experience in all aspects and achieved rapid development.However,the development of housing leasing enterprises often faces the situation that the cash outflow and the inflow cycle do not match and the funds are unable to make ends meet,so financing is needed.At the same time,the leased property has the characteristics of “clear property rights and stable rental income”,which is very suitable for asset securitization business.REITs are a good choice.It relies on strong liquidity,low leverage and high dividend payout.The advantages of proportion,tax neutrality,etc.have made great progress in the field of real estate financing.However,standard REITs have not appeared in the Chinese market,and most of them are REITs-like.Xinpai long-term rental apartment REITs officially approved by the wholesaler on October 11,2017 is a market-compliant supply-side reform,an innovation and attempt to implement asset securitization of holding properties in order to implement the state's policy of encouraging housing leasing market.It has a positive demonstration role for asset securitization and the comprehensive development of REITs in China's housing leasing market.Through the analysis of the transaction structure,risk issues,tax-saving measures and operation of the special financing plan of the new apartment.It has the following characteristics: It is an equity-based private equity REITs project with a typical dual SPV structure.From the perspective of financing efficiency,the discount of new apartment REITs has a small advantage over the discount rate of bank credit projects.From the perspective of financing scale,its financing scale is small,the main body credit is not high enough,and the financing cost is still relatively high.The way in which private placements are used also limits investor coverage and financing channels.In view of the above problems,combined with the difficulties in the development of China's REITs,the following development suggestions are proposed: improving the credit rating system and information disclosure system,introducing relevant supporting laws,implementing tax incentives and exempting policies,and strengthening the cultivation of relevant talents.