Suggestions on the Legislation of Real Eastate Securitization in Practice

• Main Authors: Chun-wei Hsu, 許君薇
• Other Authors: Gung-jeu Jeng
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/ezc632

碩士 === 東吳大學 === 法律學系 === 93 === There were 8(eight) products of Real Estate Investment Trusts published in the market since the「The legislation of Real Estate Investment Securitization」has been approved on 23, July, 2003. The amount of the investment of 8 REITs products valued over NT$22.26 billions. It has been 2 years for the legislation in practice, and shows some prospects needed to modify, such as credit rating, transparence, appraisal of real estate, developing type of real estate. The study tried to figure out these problems in practice and propose suggestions. The study tried to achieve the following goals： 1. the necessarity and feasibility of the legislation of Real Estate Investment Securitization and related legislations. 2. the impact on the real estate market of the legislation of Real Estate Investment Securitization in practice. 3. the suggestions on the legislation of Real Estate Investment Securitization and related measures. The study has two approach: (1) to collate the systems of other countries which relevant to REITs; (2) to analyze the differences of the REITs systems among those countries. The study tried to reach the results as following: 1. to propose the suggestions on the legislation of Real Estate Securitization. 2. to propose the cooperated measures on the legislation of Real Estate Securitization. The study met the conclusion as following: 1.The real estate securitization is one of the good investment choices in market Under the pattern of asset management, to gain big return with the fees of asset and real estate management, professional knowledge. It’s the reason that the traditional real estate companies use REITs as a tool to gain the profit for shareholders. In practice on real estate market, the major element to encourage the securitization is the demand of asset in economic system. REITs provide the direct way to investors for investing on real estate. In addition to the incentives on taxation, REITs also provided the investors another choice on personal taxation arrangement. 2. the experiences of REITs on other countries There are three points on proceeding the REITs: (1)Is there any appreciation of the REITs products and assets? (2)Is the price of REITs rational? (3)Is the REITs creating the steady cash flow? There are three major points on transaction: (1)good asset for investing. (2)published price. (3)achievement of return ratio. On the assets of investing ,US diversified on residential, commercial, recreation…etc. The REITs in Asia are always on the commercial asset and don’t have much diversity. 3. the appraisal of real estate The major problem on appraisal of real estate in Taiwan, is the difficulty of getting related information. The value of real transaction is always treated as a business secret. It cannot show the real dynamic value of real estate and make mistakes or wrong results on appraisal. 4. the credit rating The existing questions on rating: (1) There is not the same definition between local rating and global rating. (2) The industrial risk will be the major factor on local rating. (3) There is no standard on credit rating in Taiwan. (4) There is no standard or rule on switching the local rating to global rating. (5) The credit rating does not publish the dynamic information frequently. 5. Transparency The existing issues on transparence as following: (1) It’s difficult to get the relevant legal documents of REITs to investors. (2) The related information of REITs is all of the places and hard to get. (3) It’s inefficient concerning to information of transaction and management of real estate. (4) It’s with doubt on transaction of REITs product and published price. (5) There is no clear definition of “major issue” if there is any affair which injured the beneficial on term 57 of the legislation of Real Estate Securitization. The study suggested as following: 1. The appraisal of real estate should be rational. (1) There are major differences on the results of appraisal between appraiser and existing legislation of appraisal of real estate. The existing legislation of appraisal of real estate should be modified. (2) To formulate a rational standard and adjustment rule, for reducing the difference of value with each appraiser. (3) It’s difficult to get the information about the appraisal of real estate in practice. (4) The legal terms in the legislation of appraisal of real estate are not precisely and needed to unify. (5) The doubt on the professional issues of appraiser. 2. The credit rating system should be dynamic and rational. (1) Disclosed the information of rating. (2) Disclosed the switch standard from local rating to global rating. (3) The result of credit rating should not be the threshold of publish. (4) The rating should be with updating and dynamic function. 3. to emphasize the transparence and integration of REITs related information, and establish the indexes of evaluation. 4. To release the constrains on the type of developing real estate as the REITs product, to encourage the urban renewal.