Real estate policies have been loosened recently, but for many people, the difference is not tens of thousands of yuan in subsidies, but tens or even millions of down payments.

The days of collecting rent with flip-flops on your feet and a plate of keys in your hand are even further out of reach.

Recently, with the introduction of policies and agency declarations, the day of simple rent collection is coming soon! REITs products currently on the market can be divided into four sub-categories: industrial parks (property rights), warehousing and logistics (property rights), expressways

(franchise category), ecological and environmental protection (franchise category).

However, these underlying assets do not involve "housing", so when domestic REITs came out, there was still some gap between them and the real estate investment trust funds that everyone imagined.

This pattern will change soon, and the fifth type of REITs product, rent-guaranteed housing REITs, will soon be available to everyone.

Before introducing rent-guaranteed housing, we need to first understand the concept of "new citizens".

"New citizens" generally include migrant workers, college graduates, etc.

They have injected fresh vitality into the city, but the city has not given them a corresponding sense of belonging in return.

The difficulty of renting a house is the primary problem they face.

Therefore, rent-guaranteed housing is about to emerge: the owner of the property rights of rent-guaranteed housing is the government, and the rental targets are newly employed college students, young people, and urban basic public service personnel and other new citizens who have no housing.

Rent-guaranteed housing has two characteristics: it is cheap and has a high rental rate.

For example, the Xiamen Housing Bureau requires that the rent price of a rent-guaranteed house should not be higher than 95% of the rent of a rental house of the same quality in the same location.

Cheap rents have also resulted in higher occupancy rates. The two rent-guaranteed housing projects of CICC Xiamen REIT have a point-in-time occupancy rate of more than 99%.

Compared with industrial parks and warehousing logistics, which are also property rights REITs, the advantages of rent-guaranteed REITs are very prominent: cash flow stability is extremely high.

In addition to stability, rent-guaranteed REITs also have another characteristic, which is growth.

From June 2021 to March 2022, CICC Xiamen's two rent-guaranteed housing projects have achieved a rental unit price growth rate of more than 4%.

The two current rent-guaranteed housing REITs, one in Xiamen and the other in Shenzhen, are both economically developed coastal areas, and rent increases are still somewhat sustainable.

More importantly, rent-guaranteed housing REITs are property rights REITs and can enjoy property disposal income when the product is liquidated. This is also a very imaginative end-of-period cash flow.

Risks and Challenges Although guaranteed rental housing REITs look very beautiful, they still face some problems at the product level: Launching affordable rental housing REITs requires prior identification of affordable rental housing, and most cities currently lack specific implementation details.

Affordable rental housing REITs still have some practical issues that need to be studied in depth in terms of the definition of land properties, product structure, transaction costs, and tax support systems.

Therefore, the issuance and expansion of affordable housing REITs products may not be as rapid as imagined.

Moreover, for investors, the better things are harder to buy, and the market has already been eyeing REITs for rental housing. As a result, the pricing of the products may be relatively high, and there may even be a premium.

Whether the first batch of rent-guaranteed housing REITs has investment value still needs to wait for the placement price to be announced. I will also give you a detailed explanation at that time.

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