Future Development Trends of REITs in Mainland China

Abstract

REITs, as unconventional real estate financial tools, are considered to be the most advanced productivity representatives in the real estate industry. With the issuance of the “Notice on Promoting the Pilot Work of Real Estate Investment Trusts (REITs) in the Infrastructure Sector”, the establishment of China’s real estate investment trusts (REITs) market has become a frontier issue that academia, real estate and financial industries are most concerned about. This article mainly uses the comparison method to analyze the average return rate, FFO growth rate and dividend rate of US and Singapore REITs from 2019 to September 2020. The study found that: when the COVID-19 pandemic and the overall economic environment is unstable, all REITs have varying degrees of negative impact, especially for hotel REITs and retail REITs, the adverse impact is more serious, and the adverse impact on logistics REITs and digital computer room REITs is small. The results show that US and Singapore REITs can better resist risks by adopting the diversified portfolio theory. Based on the comparison of the performance of US and Singapore REITs, this study suggests the future of China: First, pay more attention to the central and western regions and thirdand fourth-tier cities to achieve geographic diversification; second, pay attention to the bright future of logistics REITs and new infrastructure REITs.