[Extended information]
Real estate trust and investment funds (REITs) are an important means of real estate securitization. Real estate securitization is a financial transaction process that directly converts illiquid non-securities real estate investment into securities assets in the capital market. Real estate securitization includes two basic forms: real estate project financing securitization and real estate mortgage securitization.
On July 17, 2020, China REITs Forum held "China REITs Market Road Seminar and China REITs Market Construction Launching Conference".
REITs (Real Estate Investment Trust Fund) is a kind of trust fund that collects the funds of a specific majority of investors by issuing income certificates, manages real estate investment by specialized investment institutions, and distributes the comprehensive investment income to investors in proportion. Different from the pure private placement of trust in China, REITs in the international sense are equivalent to funds in nature, with a few private placements, but most of them are public offerings. REITs can operate in a closed mode or be listed and traded, similar to open-end funds and closed-end funds in China. In the past two decades, the return of REITs in North America is the best (13.2%), followed by Europe (8. 1%), and the average return of REITs in Asia is the lowest (7.6%). Due to the impact of the European debt crisis, the return rate of REITs in Europe dropped rapidly to -9.2%, while the average return rate of REITs in North America was 12.0%. It can be seen that in different time intervals, the real estate prosperity of different countries and regions is often quite different.
The charm of REITs lies in: providing opportunities for small and medium investors to invest in the lucrative real estate industry through the "collection" of funds; Professional managers use the raised funds for real estate investment portfolio, which disperses the real estate investment risk; The equity owned by investors can be transferred and has good liquidity.