The Profit Influencing Factor Analysis Of Real Estate Investment Trusts

As a pillar industry in China,the real estate industry frequently falls into the problem of financing difficulties.Therefore,China’s real estate industry is actively exploring new financing channels to deal with the bottleneck of the current industry.The emergence of real estate investment trust fund can effectively resolve the current difficulties faced by the real estate industry.This paper first tested whether REITs had excess returns through the fama-french three-factor model,and the empirical results showed that REITs could indeed obtain excess returns in the market,which made it more meaningful to study the influencing factors of return rate in the following part.Then,from the macro level,the industry level and the market level,this paper explores the factors influencing the yield of REITs from a comprehensive perspective.Preferred by establishing the index system of factors which influence the yield,use the Hong Kong market macro,industry and market in January 2008-March 2019 monthly data,using VAR model,variance decomposition and impulse response function of measurement method,studied the three level explanation for REITs yield strength and influence.The research on REITs can provide some valuable reference for issuers to design REITs products or allocate these products as investors.At the same time,in-depth analysis of the combination of qualitative and quantitative REITs can deepen the domestic cognition of REITs and promote the development of public offering REITs in China.This paper shows that on the one hand,REITs can obtain excessive returns in the market;On the other hand,the factors influencing the REITs’ returns are very complicated.The trend of the securities market at the market level,the development of the real estate industry at the industry level and the economic cycle of the macro economy all have an impact on the returns of the REITs.There is no one factor or level that has a decisive impact on the rate of return of REITs,but the mutual influence among various levels affects the level of return of REITs,which is a comprehensive result.Among the factors studied,the ones that have a significant impact on reits’ returns are the gross domestic product of Hong Kong,the stock price index of related industries,the rental price index of related property,and the level of inflation.Through the research,we found that in addition to focusing on the financing function of REITs,we should also focus on the asset allocation function of REITs.At the same time,the study also found that due to the market structure of the subject matter of REITs in Hong Kong market,the contribution of the rental price index of residential property to the yield of REITs was less than that of the retail property rental index and the office property rental index.The structure of the subject matter market indicates that REITs as a new financing tool for real estate will not cause real estate bubble.