Research On Financing Risk Of B Company’s Long-lease Apartment From The Perspective Of REITs

With the implementation of China’s "simultaneous purchase and rent" policy,local governments in China have also launched a number of preferential policies to support housing rental,housing rental industry ushered in an unprecedented opportunity period,under this background,an important part of the housing rental industry,the long-term rental apartment market,may appear a large-scale blowout.However,there are some problems such as high financing cost and difficulty in the development of long-term rental apartment.The real estate trust investment fund(REITs)is an innovative financing mode,which provides a new investment channel for the development and expansion of China’s domestic long-term rental apartment enterprises,and also provides a strong capital guarantee for the steady development of China’s financial market.This paper systematically analyzes the financing mode and financing risks of REITs by referring to relevant literatures at home and abroad and combining theoretical knowledge with case studies.In fact,REITs opened up a new financing way,it introduced market capital to the real estate industry,thus broadening the financing channel of the real estate industry.However,when using REITs for financing,there are still many risks,including market risk,excessive financing risk,choice risk of underlying property assets,liquidity risk,operation risk,professional level risk and a series of risks.Therefore,enterprises should establish corresponding risk prevention measures to reduce risks.As a leading real estate enterprise,COMPANY B has created the first long-term rental apartment REITs project of RMB 10 billion in China,enabling the financing mode of REITs to be widely used in all long-term rental apartment enterprises.This paper mainly takes the case of LONG-lease apartment REITs of B Company as the main research object,analyzes the financing operation mode of REITs,including its product elements,structural design,etc.The main motivation of B company’s REITs financing is analyzed,including broadening financing channels,meeting the strategic needs of the company,revitalizing the precipitated assets,etc.By analyzing the comparison of financing costs between different financing methods and the market reaction after the issuance of REITs financing to evaluate the effect of REITs financing,it is concluded that the financing cost of REITs is lower than other financing methods,and investors hold a positive attitude towards the issuance market of REITs.Through analytic hierarchy process,the evaluation index system of financing risk of REITs of B company’s long-lease apartment is established.The risk factors are divided into three first-level indicators: industry-related risks,risks related to financiers and risks related to intermediaries.Industry-related risks are further divided into two second-level indicators:policy and legal risks and market risks.The risks associated with funding is divided into excessive financing risk,liquidity risk,operational risk,and the choice of the underlying property risk four secondary indexes,including principal-agent risk associated with intermediaries and the professional level of risk and risk of product design three secondary indexes,such as the use of fuzzy comprehensive evaluation method,comprehensive evaluation of the risk indicator,The result is that the overall level of financing risk of COMPANY B’s REITs is high.Among them,the higher risk is the risk related to the financing party,followed by the industry-related risk,and finally the risk related to the intermediary institution.On the basis of the relevant risk level,further put forward risk prevention measures,so as to help enterprises prudently deal with various risks in future financing,reduce financing risks,so that REITs,an innovative financing channel,can better serve enterprises.