How to understand securitization of long-term rental apartments

Since then, many domestic policies have been introduced to encourage the development of long-term rental market, and asset securitization products of long-term rental apartments have also ushered in a wave of issuance. Through the current securitization products, we can see the strong support of the national policy supervision level for the housing rental market, and it is not difficult to find the determination of market participants to make efforts in the long-term rental apartment market.

There are many participants in the long-term rental apartment market with different backgrounds, including real estate enterprises that only contain self-sustaining assets, operators with outstanding management capabilities, and hotel groups that are good at chain management mode. For some asset-light strategy entrepreneurs who have just started, they are faced with the problems of high cost and difficult financing. Therefore, innovative financing tools, through the design of bankruptcy isolation structure and fund supervision, naturally fit the basic situation and development model of long-term rental apartment industry.

For the securitization products of long-term rental apartments, its development mainly depends on the following factors: firstly, securities products are the environmental support of high-quality basic assets, which requires the further development and maturity of the long-term rental apartment market, so as to enhance the value of long-term rental apartments with refined management; Secondly, the improvement of national policies is more conducive to the stability of product development, including appropriate tax incentives and complete industrial planning; Third, the wealth of investment groups and the deepening understanding of securitization products and long-term rental apartment industry, investors should regard such products as operation management products based on property cash flow, channels to share the benefits of sustainable development of long-term rental apartment industry and long-term mechanisms for product development.

Judging from the current market situation of long-term rental apartments, for decentralized long-term rental apartments, the industry generally has problems such as low profits and difficulty in expanding the scale; For centralized long-term rental apartments, the scarcity of high-quality assets is more prominent, and the price of front-end assets is constantly pushed up due to market competition. Based on the above reasons, in the process of financing project screening, it is very important to judge the profitability of decentralized long-term rental apartment operators and the assets of centralized long-term rental apartment operators, as well as to test their ability to obtain assets.

I believe that in the near future, with the further maturity of the long-term rental apartment market, the continuous improvement of the operation mode and the substantial improvement of the operation effect, more long-term rental apartment products will appear in the market, and the design of these products will be more optimized. But at this stage, the core of the project is still around the management ability of assets or operators.

The core of asset securitization products of long-term rental apartments depends on the assets themselves and the cash flow formed by the assets. What the participants in the long-term rental apartment market need to do now is to continuously improve their operating ability and create better operating income, so as to make more effective use of securitization products for financing. At the same time, we also hope that securitization products can help the long-term rental apartment market to develop and evolve through positive feedback effect, so as to truly enter the healthy development period of the long-term rental apartment market with assets as the leading factor and operation as the first priority.