Valuation Of Long-term Apartment Reits Based On Improved Grey Forecasting Model

Under the background that houses are for living and not for speculation,China’s long term rental apartment industry has been developing in the long run,but in the process of its development,it faces financing difficulties,and the emergence of REITs has provided a solution to this problem.Since the first private REITs were issued in China in 2014,the REITs market has entered a period of rapid development,and REITs have not only provided financing channels for many real estate enterprises,but also provided high-quality investment products for the financial market,and their value has become a common concern for both issuers and investors.Therefore,this paper selects the first private REIT for long rent apartments,the Xuhui Lingyu REITs,as a case to study the evaluation method of the value of REITs for long term rental apartments and explore new channels for the development of long term rental apartment financing.Based on the theories of real estate rents and REITs,this paper compares the two methods of evaluating the value of REITs and finds that the discounted working capital cash flow method is more suitable for evaluating the value of REITs,but its future cash flow forecast is subjective.Firstly,the theory of gray forecasting model is introduced,secondly,the applicability analysis of metabolic discrete gray forecasting model is carried out,and finally,by collecting the rental data of Xuhui Lingyu over the past years,the rental data series is established,and the whitening differential equation is obtained after accumulation,and the unknown parameters are solved by using this equation to finally obtain the forecasting model.Next,we used the improved model to forecast the future rental income of the underlying assets,and calculated the appraisal value of the REITs of Xuhui Lingyu as a case study.There are two conclusions in the study:(1)The use of metabolic discrete gray forecasting model improves the traditional income method,which helps to improve the accuracy of its forecasting results.(2)Discounted operating cash flow is more suitable as an income parameter in the income method of REITs value assessment.Based on this,it is hoped that this study can add a practical new path to the valuation of long term rental apartment REITs.