REITS IN CHINA: OBSTACLES AND REASONS FOR A REIT REGIME

Abstract

REITs have been the growing trend in the Asia market in recent years. However, the rising dragon of the East seemed slow and reluctant in developing a REITs regime. It has been found that there is a lack of research conducted in this area of study, which forms the main motivation for this paper. This paper seeks to examine the factors that impede the development of REITs in China, and also identify the potential benefits that REITs will bring to China. Reasons why China should develop such a regime are also explored. It was found that the main obstacles that China faces in developing a REIT regime are the taxation issues, red tape, rules on the cooling measures, the information asymmetry and also a lack of experienced professionals in this area of management. The paper concludes with some recommendations to overcome these obstacles including setting up a clear legal framework, cutting red tape, and allowing the partnership between foreign and local investment firms.