What is reits Fund?

The full name of REITs is Real Estate Investment Trust Fund. What does it mean in simple terms? Raise money to buy a house and share the proceeds. ? It first appeared in the United States in the 1960s. REITs raise funds by issuing stocks (corporate REITs) or income certificates (contractual REITs), invest the raised funds in real estate such as residential apartments, retail properties, warehousing and logistics, and distribute the investment income to investors according to the agreement. Because the total price of real estate is often high and the liquidity is relatively poor, REITs provide ordinary investors with the opportunity to participate in large-scale real estate investment and gain income.

REITs have a similar basic structure because of the nature of raising funds to invest in real estate. Typical REITs include at least four parts: basic assets, asset management companies, product managers and holders (in addition, different types of REITs also include borrowers, SPV or asset support special plans, etc. ), which constitute the basic structure of REITs. On this basis, the structure of real estate investment trust fund is improved in practice.

The typical characteristics of REITs are high dividends, limited leverage and tax neutrality. The income distribution ratio of the first batch of listed REITs is not less than 90% of the annual distributable amount of the combined fund, which is in line with international practice. The tax neutrality of REITs means that REITs will not bring new tax burden due to their own structure, which is one of the main advantages of REITs compared with other real estate investment methods and an important driving force to promote the development of REITs. At present, there is no preferential tax provisions for real estate investment trust funds in China. In practice, incomplete tax neutrality can only be achieved by establishing a specific transaction structure.

Domestic REITs began to explore REITs 2005, released the draft for comments on a large scale in 2020, and started the pilot work in April 2020. What is the biggest particularity of REITs products in China? Public Offering of Fund +ABS? The way of holding the equity of the project company requires that the investment assets should be high-quality assets with operating time of not less than 3 years and positive operating cash flow. Up to now, the main investment targets of infrastructure REITs in China include roads and railways, intercity rail transit, Internet data centers, sewage treatment plants, industrial parks, warehousing and logistics facilities, etc. According to preliminary estimates, the current asset stock of these lines is about 35 trillion yuan. Generally speaking, the dividend ratio of the first REITS project is generally high, which increases the security of REITS project investment. The preliminary market survey results show that concessions and premiums coexist, and most projects have achieved premium transactions. The market has a high awareness of the first batch of REITS projects and a good subscription mood. Among them, AVIC Shougang Biomass REIT Project premium 1 1%, Zhongjinlin warehousing logistics premium 9. 1%, Bosera Merchants Shekou Industrial Park premium 17.8%, and Ping 'an Guangjiao Guanghe Expressway premium 5.8%.