Research On The Integration And Governance Of PPP With REITs

Since 2014,PPP projects have been vigorously promoted around the world,forming a large number of stock infrastructure projects,which constitute a potential project group for REITs issuance.in April 2020,the National Development and Reform Commission issued the document "Notice on Promoting Real Estate Investment Trusts(REITs)Pilot Related Work in the Infrastructure Sector",and China officially started to promote infrastructure public REITs.among them The investment of REITs is mainly focused on the infrastructure short board industry,which is consistent with the infrastructure type projects and public service type projects involved in PPP,providing a solution to the financing dilemma of PPP,and also helping to revitalize the stock assets and build a new development pattern in the investment field.This paper compares the development history,development status,governance mechanism,and operation process and taxation policy of PPP+REITs based on the development status of government-social capital cooperation(PPP)and real estate investment trusts(REITs)in the infrastructure sector,and summarizes the PPP+REITs in terms of transaction structure,PPP project types,investment scope,revenue sources,etc.characteristics.It also studies the problems arising in the integration and governance of PPP+REITs,focusing on the principal-agent governance mechanism of PPP+REITs,and draws lessons from international experience to provide solutions for the development and improvement of PPP+REITs in China.The conclusions of this paper include:(1)The introduction of infrastructure public REITs provides a solution to revitalize the stock assets of PPP projects,alleviate the financial pressure of local governments,and build a reasonable exit mechanism,which helps the further development of the financial market and enhance market transparency.(2)At present,China’s infrastructure public REITs are still in the early stage of development,and there are still areas to be improved in terms of issuance system,market supervision,governance mechanism and tax incentives,which to a certain extent restrict the development of PPP+REITs.(3)At present,the transaction structure of PPP+REITs in China has more layers,which has formed the principal-agent conflict between fund holders and fund managers,and the principal-agent conflict between strategic investors and other investors in the actual operation process.The moral hazard caused by principal-agent can be avoided by appropriately introducing performance incentives related to REITs’ own returns as part of the compensation system,playing the role of both incentives and supervision,and introducing the role of agents of other investors to supervise the behavior of strategic investors and fund managers.