Characteristics of enterprise real estate trust investment

The first is the trust financing model based on loans.

In this mode, trust and investment companies, as trustees, accept the entrustment of unspecified (principal) investors in the market, pool their funds in the form of trust contracts, and then lend them to developers through trust loans. Developers pay interest regularly and repay the principal to trust and investment companies when the trust plan expires. Trust and investment companies regularly pay trust benefits to investors, and pay the last trust benefit to investors and repay the principal when the trust plan expires.

Features, advantages and disadvantages

1. Requirements for the company (project): the "four certificates" are complete, the self-owned funds reach 35%, and the projects with development qualification above Grade II have strong profitability.

2. The required risk control mechanism: asset mortgage (land, real estate and other real estate, the mortgage rate is generally around 50%), equity pledge, third-party guarantee, and the establishment of independent accounts.

3. Exit mode: repayment of loan principal.

4. Financing amount: depending on the strength of the developer, the project capital demand and the negotiation results between the two parties, ranging from tens of millions to hundreds of millions.

5. Financing term: 1-2 years, and there are also trust plans with a term of 5 years or more.

6. Financing cost: generally higher than the bank's legal loan interest rate in the same period, which is 12%- 20% at present.

7. Advantages: the financing period is flexible, the operation is simple, the trading mode is mature, and the interest can be included in the development cost.

8. Disadvantages: Compared with bank loans, the cost is higher, and it is difficult to pass the regulatory approval under the current policy control environment.

Second, the equity trust financing model

In this mode, trust and investment companies raise funds from fund holders by issuing trust products, and then inject funds into the project company by means of equity investment (acquisition of equity or capital increase and share expansion). At the same time, the project company or the relevant third party promises to buy back the equity held by the trust and investment company at a premium after a certain period (such as two years).

Features and advantages and disadvantages:

1. Requirements for the company (project): the ownership structure is relatively simple and clear, and the project has strong profitability.

2. Required risk control mechanism: appointing shareholders and financial managers, equity pledge and third-party guarantee to the (project) company.

3. Exit mode: premium share repurchase.

4. Financing amount: It depends on the project capital demand and the negotiation results of both parties.

5. Financing term: 1-2 years, and there are also trust plans with a term of 5 years or more.

6. Financing cost: generally higher than the legal loan interest rate of banks in the same period, generally above 15%.

7. Nature of equity: These shares are similar to preferred shares and have no right to decide the daily operation and personnel arrangement of the company (there may be suggestions, information, supervision, etc.). ).

8. Advantages:

A) It can increase the capital of real estate companies and play the role of bridge financing, so that real estate companies can meet the conditions of bank financing;

B) Its equity is similar to that of preferred stock, which only requires a reasonable return in the stage time, and does not require participation in project management and sharing the final profit with the developer.

9. Disadvantages: generally, additional repurchase is needed, and it is still regarded as a creditor's right in accounting treatment; If there is no repurchase attached, investors will demand floating excess returns, which will affect the profits of developers.

Three. Mixed trust financing mode (mezzanine financing type)

Mixed trust investment and financing mode combining creditor's rights and equity. It not only has the basic characteristics of loans and equity real estate trusts, but also has the characteristics of flexible design and complex transaction structure, and meets the needs of developers for project funds through equity and creditor's rights and combinations.

Features and advantages and disadvantages:

1. Requirements for the company (project): The project has a good profit prospect and is generally developed by a large group.

2. Required risk control mechanism: appointing directors to the project company, land mortgage, equity pledge, third-party guarantee and capital licensing supervision.

3. The entrusted payment adopts comprehensive exit mode: loan repayment and premium share acquisition.

4. Financing amount: generally more than 500 million.

5. Financing period: 2-3 years is the majority, and the equity investment period can also be 5 years or even longer.

6. Financing cost: fixed+floating, and the fixed part is generally not less than 15%/ year.

7. Advantages:

A) Trust can enter at the initial stage of the project, increase the capital of the project company and improve the assets and liabilities institution;

B) The cost of creditor's rights is fixed, which does not encroach on the profits of developers and is easy to be capitalized; Generally, there are repurchase clauses in the equity part, and even if there is floating income, the proportion is very small.

8. Disadvantages: The transaction structure is complex, and trust companies generally require supervision of the company's finance and sales, and there will be agreements on the assessment of construction progress and sales.

Fourthly, the financing mode of property benefit trust.

Developers use the separation of property ownership and trust beneficiary rights to entrust their real estate to trust companies to form priority beneficiary rights and secondary beneficiary rights, and entrust trust and investment companies to transfer their priority beneficiary rights on their behalf. Trust companies issue trust plans and raise funds to purchase priority beneficiary rights. If the investor's priority beneficiary right is not fully paid off after the trust expires, the trust company has the right to compensate the property with the benefit of the priority beneficiary right, while the developer's secondary beneficiary right delays the compensation.

Features and advantages and disadvantages:

1. Requirements for trust property:

A) It has been completed, with clear property rights and complete certificates;

B) Can generate stable cash flow, such as shopping malls, office buildings, hotels and other leased properties.

2. Require risk control mechanism:

A) General beneficial right and priority beneficial right are generally set, which are held by the developer and the investor (trust plan) respectively; After the expiration of the trust, if the investor's priority beneficiary rights are not fully paid off, the trust company has the right to dispose of the property to make up for the interests of the priority beneficiary rights, while the developer's secondary beneficiary rights are delayed to be compensated;

B) Repurchase commitment and third-party guarantee;

C) Property mortgage, equity pledge, etc.

3. Exit mode: the developer repurchases the beneficial right at a premium or additionally subscribes for the secondary beneficial right.

4. Financing amount: determined according to the assessed value of trust property and rental income.

5. Financing term: Generally, the term is less than 3 years, but the funds can be recovered through structural design.

6. Financing cost: generally higher than the legal bank loan interest rate in the same period, 12- 18%/ year, depending on the asset quality.

7. Advantages:

A) Realizing financing without losing property ownership;

B) when conditions are ripe, it can be transferred to standard REITs products.

8. Disadvantages: The rental/sale ratio of real estate is low, and it is difficult to determine the financing scale.