What does mortgage REITs mean?

1. What is a real estate investment trust?

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 transforms 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.

Second, the classification of real estate investment trust funds

REITs are a kind of trust funds, so REITs can be divided into equity type and mortgage type.

Equity REITs, which directly invest in real estate and earn profits through rent and transaction income, belong to this category for most REITs in the world at present.

Mortgaged real estate investment trust funds use the raised funds as financial intermediaries to obtain interest income by providing loans to real estate developers and operators. Sometimes they also buy real estate loans or mortgage-backed securities from other banks and put them in their portfolios to lend to real estate development operators.

Third, the existing real estate investment trust funds in China.

1. Quasi-private real estate trust fund: there is a fund pool before the investment project.

When REITs came out, trust companies and real estate developers launched some fund-based real estate trust products. It is an innovative REITs-like product of trust companies in recent years to have a pool of funds first and then invest in specific projects.

Ping An Trust recently launched a "Ping An Wealth Ruishi Real Estate Investment (Trust) Fund". Its investment scope will cover the real estate market and financial markets in real estate-related fields.

Structural analysis: the product manager of the private banking department of a joint-stock bank told the reporter that the existing real estate trust and investment funds are quite different from real REITs. If you have to compare with REITs, it can only be partially similar. This kind of trust fund is essentially similar to the private equity fund which mainly invests in the real estate industry.

Risk: Wei Ke, a researcher at Puyi Wealth, told reporters that such products generally adopt hierarchical design and hierarchical design of trust products. For priority beneficiaries, the structured design of products is equivalent to the trustee being able to dispose of the equity of the target company at a greater discount rate, which reduces the difficulty of equity disposal. However, the disposal of equity will make it impossible for beneficiaries to obtain trust income on time. In addition, if the buyer defaults, the interests of the beneficiary can only be protected by disposing of the equity, which is a single way and also increases the risk of product investment.

Revenue: Trust company sources revealed that most of these real estate trust products similar to private equity funds belong to commitment products. Trust companies promise investors to find suitable projects for investment. Investors don't have to pay the trust company's money immediately, but pay part of the deposit first. After the specific project is determined, all the money invested by investors will be paid. If the trust company adopts this method, investors can also use the funds for other short-term flexible investments during the waiting period of the project to reduce the liquidity risk of funds. At present, the annual yield of real estate trust products is between 7%- 10%.

Suitable for people: Real estate trust products have high returns, and the development, operating conditions and stable changes of commercial returns in the investment target area may affect the repayment of funds and returns of the trust plan, which is suitable for investors with strong risk tolerance.

2. CBRC mortgage REITs: unlisted or open to institutional investors.

In August last year, the "Measures for the Pilot Management of Real Estate Collective Investment Trust Business" drafted and interpreted by the China Banking Regulatory Commission and the Central Bank has basically outlined the prototype of REITs of this style. According to public information, the REITs of the CBRC version belong to the mortgage category.

Take the REITs scheme reported by Pudong New Area as an example. The sponsors are four Pudong state-owned enterprises, including Lujiazui (600663) Group, Zhangjiang Group, Waigaoqiao (600648) Group and Jinqiao Group. These four enterprises will provide 470 million yuan of annual rental income for industrial real estate, and package the rental income rights of these properties in the future 10 to form a trust, and then the issuer will entrust the lead underwriter to issue the trust to qualified institutional investors in the interbank market.

Structural analysis: Li Yang, chief analyst of Yiyi Trust Studio, said that four real estate companies, as trust sponsors, entrusted the lead underwriter to finance with the rental income and mortgage interest of these commercial properties as the target. Investors who invest in the fund get the annual rental income, mortgage interest and other income certificates of the trust, and share the rental and loan interest income according to their shares every year. Real estate companies can continue to hold the ownership of real estate. After the expiration, the real estate company will buy back the property.

Risk: Zhang Jian, a partner of Peking University Zongheng Management Consulting Group and a real estate expert, said that these products are almost risk-free from the current public REITs scheme. The reason is that these properties have long been bought by real estate developers, and the rent has risen many times compared with when they were bought.

Benefits: Since domestic REITs have not yet come out, there is no precedent for reference in China. Because part of income is loan interest, the change of interest rate has a great influence on it. The rental income of investment projects depends on the economic environment and the quality of individual projects. Investors can investigate the gap between the current rent of the company's real estate and the market level, and whether the project quality (such as location and tenant background) is good.

Investor groups: According to industry analysis, the CBRC REITs may shield individual investors with low risk tolerance, mainly targeting domestic financial institutions, and insurance funds may also be included.

3. Equity REITs of Shanghai Stock Exchange: The listed transaction focuses on the asset appraisal value.

Equity REITs being studied by Shanghai Stock Exchange are marketable varieties. Relevant persons predict that the preliminary plan will take shape in the second half of this year, and the trading place of equity REITs has been basically determined as Shanghai Stock Exchange.

This version of REITs can refer to the products issued and listed overseas by domestic enterprises. For example, the regal REITs initiated by Cheung Kong and listed in Singapore are the first transnational REITs in Asia (the first Singapore real estate investment trust holding Hong Kong assets), and * * * raised HK$ 654.38+99 million.

Structural analysis: Stock issuers raise funds from investors, and then use these funds to buy office buildings, shopping centers, etc. The cash flow generated by these operating properties will be distributed to investors in proportion to the investment. Real estate investment trusts can hold real estate directly or through special purpose companies (SPV).

Risk: Zhang Jian said that when investing in REITs, investors should pay attention to macroeconomic indicators. When the unemployment rate rises, the GDP growth rate drops, and the rental income drops, we should be vigilant. If the long-term economic cycle is a downward trend, there are potential risks in investing in REITS.

Because REITs can be listed, the buying and selling price of REITs in the secondary market may deviate from the evaluation value. When the buying and selling price is much higher or lower than the assessed value, investors need to guard against market risks.

Income: REITs' dividend return rate is generally 7%-8%. The return is mainly rent and asset appreciation. However, in the secondary market, due to the relationship between supply and demand, the price fluctuation of REITs will deviate from the evaluation value. This is no different from buying and selling stocks. Judging from the return of REITs from domestic real estate to overseas listing in the last three years, the dividend return rate has basically remained between 6.5% and 7.5%. According to relevant regulations, REITs must distribute at least 90% of taxable income to shareholders every year.

Suitable for the crowd: in overseas cases, REITs are issued to the public, mainly stable investors who know something about REITs.