The issuance standard of real estate investment trusts

One of the standards: generate stable rental income every year.

The listing of real estate investment trust funds is to attract investors with predictable future returns on property. Both Singapore market and Hong Kong market require that most properties in REITs portfolio have signed leases and started business. According to the rent level agreed in the lease, investors can infer the rental income that the property can achieve in a certain period of time in the future, so investors can be expected to obtain long-term and stable expected annualized expected income by investing in the REITs. The second criterion: tenants with good credit and reasonable combination. It is best for the property to have internationally renowned brand tenants such as Fortune 500 and more tenants. On the one hand, internationally renowned brand tenants can guarantee the stability of REITs' expected annualized expected returns, with less default; On the other hand, many tenants can help the rent level to be reasonable. The third standard: a format that is convenient for forecasting rental income. Real estate investment trusts can provide financing for various properties, such as commercial retail properties, office buildings, industrial plants, hotels, houses and apartments. From the commercial property format, shopping centers, small commodity markets, electronic products markets, book cities, computer cities and building materials wholesale markets with a certain scale are very attractive to overseas real estate investors. This is because in most cases, these formats have many tenants and high rents. Compared with a property with only one or two big tenants, it not only greatly disperses the rent risk, but also has a higher return. In addition, judging from the acquisition trend of overseas funds in recent years, Grade A office buildings in Beijing and Shanghai are also quite popular. It is worth noting that the construction cost of industrial plants is low, but the rental return is relatively high. A considerable number of industrial factories I have recently contacted can recover their investment in five years, which means that the return on investment reaches 20%, which is quite attractive to RETIs investors. Standard 4: Property with large volume and high total value. Real estate investment trusts must have a certain scale of real estate to be listed. The standard of this scale can be reflected in two aspects, volume and overall value.

From the perspective of volume, foreign investors prefer large-scale properties, because large-scale assets can produce economies of scale. If the volume is too small, the proportion of fixed costs will increase accordingly. For example, the REITs property standard operated by Huayin Holdings is more than 50,000 square meters.

Judging from the overall value, the overall value of real estate should exceed 300 million yuan. In Beijing, Shanghai and other places, meeting any of these conditions has reached the scale requirements of the operation of Huayin Holdings REITs. This is because the unit rental price in Beijing and Shanghai is relatively high, with a volume of less than 50,000 square meters, and the total price may exceed 300 million yuan. Therefore, setting double standards can make those commercial projects with high asset quality but small volume get financing from REITs.