Risk Management for Real Estate Investment Trusts in China

REITs (Real Estate Investment Trusts) are combinations of the real estate and the finance. On account of tremendous output value of the real estate and the effect of the financial leverage, REITs characterize in both high economic value and substantial potential risk, even initiate economic disasters. Sub-prime Crisis is a good example for this. Therefore, there is a must for analyzing and controlling various risks of REITs. Based on the theory of risk management, this paper first identifies and classifies the risk factors of C-REITs, then builds up an index system, which is used to measure the contribution of risk factors of C-REITs. In the end, the paper offers several effective solutions of risk control for the analyzed C-REITs.