structure diagram of real estate trust

Real estate trust, which is called "Real Estate Investment Trust" in English, includes two meanings: first, real estate trust is a legal relationship in which the owner of real estate, the client, transfers the ownership to the trustee for the benefit of the beneficiary or for a specific purpose, so that it can be managed and used according to the trust contract; Second, the real estate fund trust refers to the act that the client entrusts his legally owned funds to the trust and investment company based on his trust in the trust and investment company, and the trust and investment company will invest the funds in the real estate industry and manage and dispose of them in his own name according to the wishes of the client for the benefit or specific purpose of the beneficiary. This is also a real estate financing method that is widely used in China.

in June, 23, the central bank issued document No.121 to restrict the bank financing of real estate enterprises, and real estate trust began to become a hot spot pursued by enterprises. Real estate trust refers to a kind of trust behavior that a real estate trust institution manages, operates or handles the real estate and related assets entrusted by the client for the benefit of the beneficiary.

2 development course

In p>1883, the United States first established the Boston Personal Property Trust (Bost

Shanghai International Financial Center

on Personal Property Trust), but it was not until 192 that the American investment industry developed in an epoch-making way, which was also caused by the surplus funds held by a large number of rich people in the United States after the war. After the new york stock market crashed in 1929, the US SEC began to regulate investment companies. In order to ensure the rights and interests of investors, the United States launched a series of federal securities trading activities, including the Securities Act of 1933, the securities exchange act of 1934 Act, the Public Utilities Holding Company Act of 1935 and the trust deed Act of 1939, and the Investment Company Act and the Investment Consultant Act of 194, which became the basic framework for the management rules of investment companies in the future. According to Article 4 of the American Investment Company Act of 194, investment companies can be divided into three categories: face-amount certificate companies, Unit Investment Trust companies and Management Companies.

among them, the manager company is the most commonly used among the three types of investment companies. According to Article 5 of the Investment Company Law, it can be divided into four types: Close-end Type investment companies, Open-End Type investment companies, Diversified Type investment companies and Non- Diversified Type investment companies. Massachusetts Commercial Trust is the predecessor of REIT. Driven by economic interests, it was originally adopted in the form of trust to avoid the state law prohibiting companies from holding real estate for investment purposes. Later, it gradually developed into a real estate investment organization that evaded corporate income tax, and was recognized by the Supreme Court of the United States as a commercial trust similar to a company and taxed as a federal company organization, which led to its development stagnation. However, due to the continuous improvement of investment trust laws and regulations and the good economic development, the development of investment trust in the United States is growing sturdily. Focusing on the advantages of investment trusts, the United States Congress formally created REITs by amending the internal tax code in 196, stipulating that REITs with relevant organizational, income and income distribution elements in Articles 856 to 859 of the Act can enjoy tax exemption.

in other words, even if REIT is organized as a company, it is not necessary to pay corporate income tax, but only levy personal income tax on shareholders or investors, so REIT is generally regarded as a pipeline function with the nature of investment medium. In 1976, the United States Congress passed the tax reform bill, which abolished the requirement that REITs must be organized by unincorporated trusts or associations. Therefore, today's REITs in the United States can be organized by companies or trusts, but they must be non-banks, savings and loan institutions or insurance companies in the sense of federal income tax. Through these institutions, funds can be raised from the public. Based on the principle of risk dispersion, the investment of real estate entities mainly engaged in the management of buying and selling or the trust investment of mortgage-backed loans belongs to a long-term investment commodity, and its basic structure consists of four entities: real estate investment trust fund, manager company, custodian institution and investor. However, according to the provisions of the 1986 tax company reform law, REIT must hire independent real estate experts to carry out the daily activities of managing REIT.

3 classification of nature

Real estate trust business has a wide range of contents, which can be divided into:

① entrusted business, such as real estate trust deposit, real estate trust loan, real estate trust investment, real estate entrusted loan, etc.;

② Agency business, such as issuing stocks and bonds, clearing debts and designing houses;

③ financial leasing, consulting, guarantee and other businesses.

compared with bank loans, the financing of real estate trust plan has the advantages of reducing the overall financing cost of real estate development companies, being flexible and convenient in raising funds and flexibly adjusting the interest rate of funds. Due to the particularity and flexibility of the trust system, as well as the unique function of property isolation and rights reconstruction, financial innovation can be carried out in the modes of property right, income right and preemptive right, making it one of the best financing methods.

4 development status quo

When people feel helpless about high housing prices, "collective anxiety" appears. When this kind of "collective anxiety" appears, everything related to real estate

real estate trust

will stimulate people's anxiety, and real estate trust will naturally be "anxious" and emotionally concerned. In fact, in our life, there has been a case in which a rumor has crushed a company many times. In the credit union meeting, "the last straw to overwhelm the camel" may seem to be a rumor or unintentional misunderstanding on the surface, but behind it is the irrationality in "collective anxiety". In the network era, when the dissemination of information is more convenient, it is more important to distinguish information.

[1] It can be said that the real estate trust leaks all the time, and the tight capital chain of real estate enterprises increases the risk of real estate trust redemption, and the Greentown incident and the redemption problem of real estate enterprises in Shanghai and Beijing have aroused market concern. This also makes many investors afraid of real estate trusts. Although real estate trust products face many problems, they cannot be totally denied. Relevant professionals have given suggestions. From the beginning, the yield of real estate trust products is still relatively high. Investors must be cautious when buying: first, it depends on the quality of the project itself, second, the risk control measures of the real estate trust plan, and third, it depends on the qualification of the trust company. Real estate trust still has investment value.

However, experts suggest that you must keep your eyes open when buying a real estate trust plan. In addition to examining the quality of the project, we should also strictly grasp the risk control measures of the product, and do not unilaterally pursue high returns and ignore the risks of the project and the product. In addition, in the choice of trust companies, we should try our best to choose the products issued by state-controlled trust companies with strong shareholder background and financial strength.

from the perspective of investment types, the stock market has hit new lows repeatedly, the negative news from the external environment continues, the signs of rebound are not clear, and the risks are difficult to control. However, real estate investment is strictly controlled and affected by the purchase restriction order, and the risk of investing in real estate increases. In comparison, the expected annualized rate of return of the previously issued real estate trust plans is mostly above 1%. Although it is also regulated, it is an ideal choice for investors to know more about real estate trust projects as a kind of asset allocation.

5 Prospects for Development

Since May 211, the CBRC has gradually started to regulate the real estate trust business, and has repeatedly reduced the issuance of real estate business through window guidance. In June, the real estate trust project was required to be reported beforehand instead of afterwards. It can be seen that the CBRC gradually took the initiative in its own hands and began to take the initiative. Starting from September, it is required to monitor the redemption risk of stock items one by one. After that, the Greentown incident broke out. This series of measures can show the determination and strength of the CBRC to rectify the real estate trust business. This time, the suspension of four trust companies can be said to have sounded the alarm for the industry again.

under the active adjustment of the strict control trust network by the regulatory authorities, the real estate trust business has obviously cooled down. According to the monthly report of the trust market in September released by the trust research institution Puyi Wealth yesterday, the circulation of trust products in the real estate sector in September was 49, down 25 from the previous month, accounting for a decrease of 2.57 percentage points.

This suspension is a signal released by the CBRC to continue to strictly control. As for whether the real estate trust business will be suspended, there is no news, but it can be seen that the regulatory policies are gradually starting to attack various trust companies. Due to the rapid development of real estate trusts before, this also led to the accumulation of risks, and the CBRC's move was also considered from the perspective of risk control.

6 sources of funds

funds are the basic conditions for real estate trust and investment institutions to engage in trust. Real estate

fund-based real estate trust

Property trust institutions have different ways and means of raising funds from banks. The main sources are:

Real estate trust fund

is the working capital set up by real estate trust and investment companies to operate real estate trust investment business and

other trust businesses. The main sources of funds for trust and investment companies in China are: financial allocation, social fund-raising and self-retention;

Real estate trust deposit

refers to the deposit handled by trust and investment institutions within a specific source of funds. The scope, duration and interest rate of its funds are stipulated, promulgated and adjusted by the People's Bank of China;

fund-raising trust and agency fund-raising

This is a way for trust institutions to issue bonds and stocks directly or on behalf of enterprises, competent departments of enterprises, organs, organizations and institutions to raise funds;

fund trust

refers to a trust business in which a trust institution accepts the entrustment of a client and independently manages its monetary funds. The source of trust funds must be the funds that each unit can control independently or the funds owned by units and individuals, mainly including unit funds, public welfare funds and labor insurance funds;

*** mutual investment fund

that is, investment fund or * * * mutual fund. For the domestic public, it is a relatively new investment tool, but it has a history of more than 1 years abroad and is booming day by day. It is the most promising industry in modern securities industry. In the financial market of developed countries, it has been proved by practice to be a quite advanced investment system and has become a decisive financial tool.

7 classification of investment

REITs can be divided into three categories according to the different investment of funds:

equity REITs. Equity REIT directly invests in and owns real estate, and its income mainly comes from the operating income of its subordinate real estate. The investment portfolio of income-oriented REIT varies greatly depending on their business strategies, but usually they mainly hold income-oriented real estate such as shopping centers, apartments, office buildings and warehouses. Investors' income comes not only from rental income, but also from the value-added income of real estate;

mortgage reit

. Mainly in the role of financial intermediary, the raised funds are used to issue various mortgage loans, and the income mainly comes from the handling fee and mortgage interest charged by issuing mortgage loans, as well as part of the rent and value-added income of mortgaged real estate obtained by issuing participatory mortgage loans;

hybrid

. As the name implies, such REIT can not only invest in real estate equity, but also engage in real estate mortgage loans.

The early real estate trusts were mainly equity-based, aiming at obtaining the property rights of real estate in order to obtain operating income. Mortgage trust has developed rapidly, and now it has surpassed property trust, mainly engaged in long-term real estate mortgage loans and the purchase of mortgage securities. But hybrid is undoubtedly the direction of future development. In addition, REIT has many other classification methods.

For example, according to whether shares can be issued additionally, they can be divided into open and closed types. Closed REIT are restricted in circulation and may not issue new shares at will; On the contrary, open REIT can issue new shares at any time to increase funds for investing in new real estate. According to whether there is a definite time limit, it can be divided into regular type and indefinite type. Regular REIT refers to the prior agreement that the fund is sold or liquidated for a certain period at the beginning of fund issuance and the investment income is distributed to shareholders. The indefinite type is not. According to the determination of the investment target, it is divided into specific type and unspecified type. When the fund is raised, the specific investor who invests in a real estate or mortgage is a specific REIT；; On the contrary, after raising funds, it is decided that the appropriate investment target is unspecified REIT.[2]

8 Operation process

The operation process of real estate trust can basically be divided into two modes: one is the American mode, and the other is the Japanese mode. In the final analysis, these two models are the difference between capital trust and real estate asset trust. Due to their different national conditions, the United States focuses on capital trust REITs, while Japan focuses on real estate asset trust REITs.

9 American model

Real estate trusts in the United States usually appear in the form of funds. At the establishment stage, their main operational processes are:

real estate market policies

(1) evaluating funds. In order to meet their own needs, fund sponsors plan to raise REIT funds. The main tasks include: estimating the required amount of funds, confirming the choice of REIT funds as a financing tool, and considering whether the profitability of investment targets can reach the necessary rate of return.

(2) contact underwriters, promoters and underwriters to discuss investment and fundraising, including investment details, fundraising details and underwriting methods.

(3) Contact lawyers and accountants. Discuss the legal and accounting issues related to the fund application and issuance with qualified lawyers and accountants, select law firms and accounting firms to serve the whole process of establishment, and draw up the application documents. At this time, the financial feasibility analysis of the investment plan is basically determined.

(4) contact the real estate consulting company. If the future management of the fund is undertaken by a real estate consulting company, it is necessary to identify the target and sign a REIT management consulting contract to determine its rights and obligations.

(5) When all the documents are ready, you can apply to the SEC for offering. After the application is successful, you should decide the custodian and sign the REIT contract.

The real estate trust entered the formal operation stage after it was established and listed on the stock exchange. It is worth noting that such securities are generally rated by credit rating agencies. The real estate investment trust company must implement the investment plan according to the agreement made at the establishment stage, and the custodian institution will conduct business operations and carry out real estate trading, commission collection and payment, rent and related business investment income and expenditure according to the instructions of the real estate investment trust company. Investors buy REIT securities through brokers, and the investment income is obtained from the custodian.

in the United States, the registration of initial public offering of real estate trust securities is based on Form -11 of the Securities Law of 1933, which requires detailed disclosure of REIT's investment policies and policies.