Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/220773
Title: ROAD TOWARDS SECURITIZING CHINA'S REAL ESTATE: THE EFFECT OF OPERATIONAL EFFICIENCY ON PERFORMANCE, RISK, AND RETURN OF CHINESE PROPERTIES
Authors: ZHAO ZICEN
Keywords: Real Estate
Ong Seow Eng
2018-2019 RE
China
RE
Securitization
China-centric REITs
Chinese developers
Operational Efficiency
Onshore C-REITs
Performance
Risk and Return
Issue Date: 14-May-2019
Citation: ZHAO ZICEN (2019-05-14). ROAD TOWARDS SECURITIZING CHINA'S REAL ESTATE: THE EFFECT OF OPERATIONAL EFFICIENCY ON PERFORMANCE, RISK, AND RETURN OF CHINESE PROPERTIES. ScholarBank@NUS Repository.
Abstract: China is currently the second largest economy in the world in terms of GDP and has the second largest market in terms of commercial real estate transactions. However, to date, China has no real equity REIT. In the past decade, neighbouring Asia-Pacific regions such as Australia, Japan, Singapore, Hong Kong and India have introduced REITs as a form of real estate securitization and have, hence, experienced tremendous growth in the market and improvement in the assets. This leaves China as the last big economy that has yet to kick off a secondary investment vehicle. The development of an active REIT market requires both the expertise of qualified and experienced REIT managers and a well-structured legislative and regulatory framework. While there might exist the legal legislative and technical obstacles in China, one other critical issue is that there is a lack of sophisticated investors. Retail investors do not have an appreciative mindset towards long-term income-generating assets due to a lack of academic research work directed towards China-centric REITs and China-developers. Through this paper, I seek to understand the performance of securitized versus non-securitized Chinese properties and shed light on the lagging C-REITs industry. This project dissertation hypothesizes that to measure the performance of securitized versus non-securitized assets is to compare the relations between revenues from real estate assets to the expenses needed to generate those revenues – operational efficiency. The results illustrate two significant findings about the Chinese properties. For both Chinese developers and China-centric REITs, the more efficient a firm, illustrated by a lower operational efficiency ratio (OER), the better the operational performances, illustrated by higher ROE. Secondly, securitized assets held under REITs perform better than non-securitized assets held under Developer’s books.
URI: https://scholarbank.nus.edu.sg/handle/10635/220773
Appears in Collections:Bachelor's Theses

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