Research On The Optimization Of Valuation Methods For Government Subsidized Rental Housing REITs

China’s increasing urbanization has given birth to the problem of housing difficulties for new citizens and young people in cities with net population inflows.Under the policy guidance of “houses are for living in and not for speculative investment",government-subsidized rental housing has emerged as one of the major decisions of the Party Central Committee and the State Council to promote the realization of housing for all people.However,the existing financing means are so limited to support the development path of "marginally sustainable" government-subsidized rental housing.REITs tools,on the one hand,can effectively revitalize the construction of infrastructure projects for government subsidized rental housing etc.to achieve a rational allocation of social capital by following the principle of the right direction,on the other hand,support the development of government subsidized rental housing,alleviate the burden of government subsidized rental housing enterprises and the government,so as to achieve a virtuous closed loop of financial support for the healthy development of the industry.However,REITs are still an emerging financing method for the subsidized rental housing industry,and there are still gaps in research in related fields.In addition,since the traditional income method cannot take into account the uncertainty factors in the market when valuing the REITs of subsidized rental housing and has the shortcoming of strong subjectivity in cash flow assumptions,there is room for further exploration of the valuation direction of the REITs of subsidized rental housing.In view of this,this paper combines specific cases to carry out research on the valuation optimization of guaranteed rental housing REITs,which has certain theoretical and practical significance.Focusing on the valuation and pricing of government-subsidized rental housing REITs,this paper provides a theoretical overview of relevant research findings in the field of REITs at home and abroad.Secondly,the valuation and pricing model of government-subsidized rental housing REITs is systematically elaborated by constructing an income approach mathematical model and applying Monte Carlo simulation method to improve the model.Finally,one of the first three government-subsidized rental housing REITs in China,CIMB Xiamen Anju REIT,is selected as the main case study in this paper to empirically test its valuation and pricing results.The results indicate that CIMB Xiamen Anju REIT has been undervalued.The main contribution of this paper is to optimize the valuation method of government subsidized rental housing REITs by introducing two risk variables,vacancy rate and rent level,through Monte Carlo simulation method,which compensates to a certain extent the defects of the traditional income method valuation with large subjective bias and difficulty in considering market uncertainties,and provides a new feasible idea for the valuation of similar government subsidized rental housing REITs,which is conducive to further supporting the development of the government subsidized rental housing industry.