The Chinese REITs Is Coming, But The Path Is Challenging. Recap For The 2nd Real Estate Equity Investment & REITsVW Staff
With the increase in the Maturity of the Chinese ABS market, the C-REITs is now the most anticipated.
May 17, CaishiV Hanzhe Zhang made the opening remarks for the 2nd Real Estate Equity Investment & REITs. He pointed that REITs is the future trend of the commercial real estae investment, one of the major ways for the Europe, America countries. In the meantime, China has the focus to the traditional real estate industry on inventory housing and asset managing. The country departments have laid out multiple regulations and references.
The People’s University, Real Estate Research Institute Director Kuang Weida, made a keynote speech At the 2nd Real Estate Equity Investment & REITs on May 17. His overview of the macroeconomy outlook and the potential impact on real estate market: The REITs in the US are led by the investors. Compared with Asia, especially Hong Kong REITs are led by the real estate developers. In which, we have to change the minds of the developed and the development styles. Changing from build to sell into build to manage. Converting developers from entrepreneurs to capitalists.
APREA CEO Peter Verwer thought, the Chinese Financial Department and administrators have positive feedback from the future development of REITs. In his opinion, with the regulations setting up, China will be changing from Quasi-REITs to Pre-REITs. The tax laws are expected to be available by the end of the year. In some industries, there are should expect some discounts by the tax law. He also mentioned that, REITs is a technology, under some circumstances, we are able to change the needs of the market, which we have seen from the Chinese real estate market will be profitable based on the changes of the capitalism. Under the question of: What are some experience that the Chinese-REITs can obtain from the past worldwide experience, Peter stated: “We have to make REITs to have a much stronger tight will the capital market, instead of being simply a tool. One of the best applications are from the United States. They have a wide variety of capitals, such as mining, infrastructures, education facilities, commercial structures… In India, we have seen huge amount of influx, by providing more opportunity for the institutions. Other than that, India has managed to increase the real estate development technologies.”
Dejan Radanovic from MicroNest shared his thoughts on the Australian REITs. “Compared to the rest of the world, even though Australia is the third largest, but the Australian long-term rental apartment REITs did not perform well. One of the reasons is, the interest rate in Australia is low, in other words, the investment return rate along with the interest rate has to be attractive to the investors. In order to have the investors satisfied with the investment, I think, we to make our product persuasive, high quality, passing some profit to the investors, which can perform a healthy, suitable future development.”
Wanggang, Chinese REITs Alliance Shared his experience during the speech of the Future Roads for Chinese REITs. In his opinion, REITs have characteristics from both stocks and bonds, and is considered as a great product type. Currently, securitization in China requires one year stable cash flow, to show to the public that the company has the ability to maintain itself during the fiscal year. Wang also pointed out, the combination for structuring assets are very important, which is a blank area for the Chinese-REITs and Quasi-REITs. In the future, the Chinese-REITs have to resolve the following, Public offering, Equity REITs and tax-related issues.
Finfo Global, being a professional B2B finance media, has been in the industry for years, maintained well relationships with multiple worldwide financial institutional investors. With the help of multiple academic institutes, appraisal agencies, Finfo Global has set up the 2017 Real Estate Investment, Jiefu Awards are in order to praise the firms that have excellent performance in the past year.
In the near future, Caishiv is going to host the NEXT ETF 2018. If you are interested, please go to: www.nextetf.com/index.php/en/index.html.