The Research On The Value Evaluation Of Infrastructure REITs

Under the background of China’s infrastructure entering the era of stock,short-term economic pressure and high local government debt,in April 2020,the national development and Reform Commission and the China Securities Regulatory Commission jointly issued the circular on promoting the pilot work of real estate investment trust funds(REITs)in the field of infrastructure,which is undoubtedly conducive to attracting social capital to participate in the construction,updating and upgrading of infrastructure and broadening the financing channels in the field of infrastructure.In order to ensure the healthy and rapid development of infrastructure REITs,we should not only pay attention to its investment value,but also pay attention to its possible risks.In recent years,China’s REITs market has begun to set sail.As an important attempt to develop China’s infrastructure public REITs,it is of great significance for rich countries to initiate water REITs.This paper adopts the methods of case analysis,qualitative analysis and quantitative analysis,with the optimization of value evaluation methods as the core,supplemented by the judgment of value influencing factors.Starting from the source of income,investment attributes,valuation methods and valuation elements of infrastructure REITs,this paper takes Fullgoal Capital water REIT as an example to explain the project investment value and influencing factors in detail,The traditional income method(cash flow discount method)combined with Monte Carlo simulation method is used to optimize the value evaluation of infrastructure REITs projects,and the investment value of Fullgoal Capital water REIT is calculated based on this method,and then compared with the price in the secondary market to verify the feasibility of this method.Finally,we put forward reasonable suggestions on the value evaluation of infrastructure REITs from the aspects of valuation methods,basic asset evaluation,industry database,and investor education: first,use Monte Carlo simulation to optimize the calculation accuracy of traditional income method,and then use the market method for cross validation after the number of comparable cases in the market increases.Second,improve the value evaluation system of basic assets and disclose more data after the securitization of underlying assets.The third is to establish an official industry database to provide data support for subsequent researchers to make objective predictions on value evaluation.Fourth,increase the popularization and education of professional knowledge for investors,and promote the sustainable and healthy development of infrastructure REITs.In a broad sense,the value evaluation should not only predict and calculate the net value of the fund,but also include the investment prediction of investors,the operational decisions of relevant entities and the institutional support of policy makers.Only with the joint efforts of various parties,can the public REITs of infrastructure develop steadily and healthily,revitalize China’s huge infrastructure stock assets,and help China’s infrastructure sector continue to rise.