Land bonds

・ Lower financing cost

・ Strong initiative

・ Lower risk and easily accepted by the public because guaranteed by the government.

・ Adjust the capital structure easily and the bonds can be recycled.

・ Break through the geographical restrictions.

There are some legal obstacles and lack of suitable issuers at present. The urban land ownership belongs to the country and the local government to perform management functions in China. But the local governments especially the city governments do not have the capability and experience issue bonds independently because their independence in fiscal levy is not strong.

Applicable to the project with large scale and short development cycle, especially suitable for the situation that period does not match between the bank loans and funds need of city land reserve.

Land investment funds

It can be gathered huge funds in a relatively short time to develop the land, and has a prescribed period so that minimize the number of land transfers what is advantageous to the stable price and promote the land development.

The range of audiences is narrow and poor fluidity, it will increase the risk once the huge funds go wrong.

Applicable to investment the land projects with large scale, more uncertain factors and long investment cycle.

Land trust plan

・ Low cost.

・ Convenient to raise money and don’t need complicated programs.

・ The funds rate can be adjusted flexibly.

・ Spread the risk effectively.

The most important way to flow the trust is releasing the transfer information on the platform provided by trust company and clinching a deal independently after negotiating by both sides of trading. There are quite a gap from the unified national flow market because of the range of audiences is narrow, poor fluidity and inefficient communication. Besides, government guarantee has certain risk and it is a high threshold for the individual investors.

The land development of urban new zone generally belongs to large project that need raise huge funds in a relatively short time. It is more appropriate to use the land trust plan mode.