A Case Study On Risk Management Of Yuexiu REITs

Real estate has been a key driver of China’s economic growth.In recent years,with the expansion of infrastructure construction and real estate investment,the incremental space is continuously compressed,and the difficulty of financing becomes a major problem for the development of the real estate industry.The emergence of REITs provides a new supply for the asset management market,which can effectively solve the long-term financing problems of real estate enterprises,and widens the investment channels of social capital,provides new financial investment products for small and medium investors,and has practical significance in promoting the benign development of China’s financial market.However,China’s public REITs are currently in the exploration stage.REITs market is still not mature enough.The development of public REITs faces a series of risks such as uneven distribution of underlying assets,excessive financial leverage,and market volatility.Therefore,this paper selects Yuexiu REITs as the research object.The issues to be studied are to analyze the types and causes of risks of Yuexiu REITs,to evaluate and measure the risks of this REITs product,in the hope that it can contribute to the development of public REITs in China.This paper also puts forward some suggestions on the risk control of Yuexiu REITs,hoping to provide certain experience for the risk prevention and management of public REITs in China.This paper analyzes the various risks faced by Yuexiu REITs through a review of the relevant research literature at home and abroad,combined with specific cases.First,by studying the distribution of underlying assets,financial status,market risk and environmental background of the product in the process of operation,it is found that Yuexiu REITs has good performance and extensive distribution of property assets,but the distribution of its underlying assets is geographically concentrated and there is a certain risk of underlying assets.Moreover,the long-term "high leverage" operation of Yuexiu REITs also makes them subject to certain financial risks.Second,this paper quantitatively analyzes the market risk of Yuexiu REITs,and constructs a GARCHVa R model by selecting the earnings data of Yuexiu REITs from 2016 to 2022,and the metric results show that the GARCH(1,1)model based on t-distribution has a better fit,and the overall performance of Yuexiu REITs’ Va R value is relatively smooth,which can control the price risk better.risk.Finally,we propose recommendations for the specific risks of Yuexiu REITs.Through the above study,this paper puts forward the following suggestions on how to manage the risk of Yuexiu REITs.Yuexiu REITs should strengthen market analysis and establish a risk early warning mechanism to prevent market risks in the development process;in the operation process,we should focus on the quality of underlying assets and optimize the asset structure to help the smooth issuance and sound operation of REITs products and enhance investors’ investment confidence.In addition,relevant market regulators in China also need to do a good job in investor education and guide investors to correctly understand the financial attributes and risk characteristics of REITs,so as to promote the long-term development of public REITs.