Study On Credit Risk Of REITs In Housing Leases

Real Estate Investment Trusts(hereinafter referred to as “REITs”)began to grow in China in 2014,and with many advantages of this product,it has developed rapidly in China in recent years and it is still in the ascendant.As of December 2018,China has issued 42 REITs with a total scale of 87.118 billion yuan.In China's strong support for the development of the rental housing industry,in March 2018,Poly rental housing REITs launched,which is undoubtedly important to promote the development of the rental housing market and provides guidance and reference for the capital market to serve the real economy and plays an indispensable role in the innovation of China's capital market.However,risks and opportunities are coexisting,while China's capital market and rental housing industry is not perfect,such REITs products will inevitably have certain credit risks.So,the credit risk of Poly rental housing REITs products is being studied in this paper.This paper expounds the theoretical basis of REITs,analyzes the market development and risk status of rental housing REITs,analyzes the transaction structure,basic assets and credit enhancement methods of Poly Real Estate Leasing Housing and then refines credit risk from the perspective of real estate industry to the perspective of micro-based assets and property targets.This paper analyzes the credit risk of the REITs products and proposes that enterprises should establish a risk-distribution mechanism for housing lease REITs,the government should establish a preferential mechanism for housing lease REITs and improve the policies and laws and regulations on housing lease REITs as soon as possible.And establish the credit evaluation system of REITs related subjects,improve the housing rental market mechanism and expand the range of housing rental REITs investors and so on.The main findings of this paper are as follows: First,from the perspective of credit risk of the entire real estate industry,the entire real estate market is facing the risk of real estate bubble and the imbalance of real estate supply and demand leading to the decline of house prices,which causes the credit risk arising from the decline of REITs rental income.Second,from the credit risk of the REITs industry,the credit risk of this REITs is lower than the industry average compared with the REITs industry.Third,from the credit risk of the original equity holders,the original equity holders have good resistance to risks and low credit risk in terms of their solvency,profitability and operational efficiency.Fourth,from the perspective of the basic assets of REITs products,the analysis of the two scenarios of the property assets cash flow forecast and scenario analysis shows that the credit risk of the REITs is low.Fifth,from the aspects of legal disputes between original equity holders and ownership of property rights,it includes the risk of legal disputes of original equity holders will decline,the risk of default of property asset price changes and the default risk of property assets not being transferred properly and the use of property assets that has not been changed from commercial and office to rental housing.This paper analyzes the credit risk of REITs products from the industry influence to the product itself.Due to the limited research horizon and objective conditions,there are still some shortcomings in this research.