Why Investors Love and Hate Real Estate Trusts

Institutional and retail investors perked up recently when Sichuan Trust Co. Ltd. started offering a two-year, real estate-linked trust product boasting annual yields of up to 13.5 percent. By October 13, they'd answered the call by investing around 800 million yuan.

Meanwhile, a far less enthusiastic group of third party distribution agents balked at the offer. They sensed risk after learning that Sichuan Trust was raising money to repay loans issued by China Construction Bank to Zhongrong Trust Co. for property development.