By Zhang Liping & Zhang Jiaming, Research Institute of Finance, DRC

Research Report, No.158, 2021 (Total 6223) 2021-6-16

Abstract: At present, pilot work on real estate investment trusts (REITs) in China is in progress and it will be pushed ahead more smoothly by drawing on the experience of some other countries. As the birthplace of REITs, U.S. ranks the first in terms of its market scale in the world, and its experience shows that the effective role of REITs is inseparable from certain conditions. The stable and sound development of REITs in the U.S. mainly attributes to the following four factors: one, the unified identification standards with defined orientation; two, the basic assets with stable income; three, the tax collection arrangements conducive to the implementation of RRITs standards; four, the advanced capital market with smooth channels for financing. In comparison, the development of REITs in China is yet to be enhanced in the above-mentioned aspects. To this end, the paper raises the following policy options: one, the cross-department coordination needs to be strengthened; two, the formulation of a set of unified identification standards and regulatory rules needs to move faster and based on that, targeted taxation institutional arrangements need to be rolled out; three, real estate leasing market of all types needs to be cultivated with vigorous efforts so as to provide high-quality basic assets for the development of REITs; four, the listing and financing channels for REITs need to be kept unblocked and explorations and innovations need to be made on risk hedging tools for REITs.

Keywords: REITs, US experience, real estate investment and financing, capital market