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Real estate assembled fund trusts dip 84.63%

By Jiang Xueqing (chinadaily.com.cn) Updated: 2015-01-29 17:15

Newly established assembled fund trusts for real estate in China dropped 84.63 percent year-on-year to 4.36 billion yuan ($698 million) from Jan 1 to Jan 28, according to usetrust.com, an online information platform on trust products and the trust sector.

An assembled funds trust is a trust in which two or more trustors place their currency in a trustee's hand and the latter manages these assets for the benefits of the trustors.

Analysts said many trust companies are avoiding real estate projects because an oversupply of housing in some regions has led to concerns about risks in the sector. Financial market insiders are also worried about defaults in the property sector as some developers were affected by China's increasing efforts to combat corruption.

Statistics from usetrust.com shows that real estate companies have to repay 241 billion yuan worth of trust products in 2015, adding to the woes of property developers whose sources of funding are already drying up, said Shuai Guorang, an analyst at usetrust.com.

Some high-quality real estate companies, on the other hand, no longer prefer trust schemes as their major financing channel but issue debts or cooperate with asset management platforms.

According to the National Bureau of Statistics, national real estate investment growth further slowed to 10.5 percent in December from 11.9 percent in November.

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