Abstract: 

Against the background of stock-asset-oriented urban development, renovation and upgrading have become the mainstream direction of urban village regeneration, and the inclusion of urban renewal facilities in the pilot of public REITs has created a historic opportunity for the capitalization of stock assets in urban villages. Renovated urban village assets can generate long-term and stable earnings and possess commercially valuable attributes of pricing and trading. However, their capitalization and exit are hindered by three major obstacles: unclear property rights, cash flow pressure and inadequate exit mechanisms. This paper proposes issuing REITs with operating revenue rights as the underlying assets, locking in cash flow via long-term operating agreements, and establishing a compliance system supported by government coordination and administrative recognition. Furthermore, relevant policy suggestions are put forward from three aspects: pre-compliance management, financial support and valuation integration. The research provides a feasible path to realize a closed-loop financial cycle for the revitalization of stock assets in urban villages.

Full text: Financial Innovation for Revitalization of Stock Assets in Urban Villages: Exploration Based on Operating Revenue Rights