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Investment apportionments among participants of PPP rental retirement villages

Shijing Liu (School of Management Engineering, Shandong University of Finance and Economics, Ji’nan, China) (Deakin University – Geelong Waterfront Campus, Geelong, Australia)
Hongyu Jin (Deakin University – Geelong Waterfront Campus, Geelong, Australia)
Chunlu Liu (Deakin University, Melbourne, Australia)
Benzheng Xie (Shandong Jianzhu University, Jinan, China)
Anthony Mills (Deakin University – Geelong Waterfront Campus, Geelong, Australia)

Built Environment Project and Asset Management

ISSN: 2044-124X

Article publication date: 6 December 2019

Issue publication date: 5 February 2020

Abstract

Purpose

The purpose of this paper is to examine public–private partnership (PPP) approaches for the construction of rental retirement villages in Australia and to allocate the investment proportions under a certain project return rate among three investors which are the government, private sectors and pension funds. The apportionment will achieve a minimum overall investment risk for the project.

Design/methodology/approach

Capital structure, particularly determination of investment apportionment proportions, is one of the key factors affecting the success of PPP rental retirement villages. Markowitz mean-variance model was applied to examine the investment allocations with minimum project investment risks under a certain projected return rate among the PPP partners for the construction of rental retirement villages.

Findings

The research findings validate the feasibility of the inclusion of pension funds in the construction of PPP rental retirement villages and demonstrate the existence of relationships between the project return rate and the investment allocation proportions.

Originality/value

This paper provides a quantitative approach for determination of the investment proportions among PPP partners to enrich the theory of PPP in relation to the construction of rental retirement villages. This has implications for PPP partners and can help these stakeholders make vital contributions in developing intellectual wealth in the PPP investment area while providing them with a detailed guide to decision making and negotiation in relation to investment in PPP rental retirement villages.

Keywords

Acknowledgements

The authors thank the anonymous referees for their insightful comments and valuable suggestions on an earlier version of the paper. The first author is grateful to the China Scholarship Council (CSC) for a PhD scholarship (No. 201508370071).

Citation

Liu, S., Jin, H., Liu, C., Xie, B. and Mills, A. (2020), "Investment apportionments among participants of PPP rental retirement villages", Built Environment Project and Asset Management, Vol. 10 No. 1, pp. 64-77. https://doi.org/10.1108/BEPAM-02-2019-0018

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited