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Article
Publication date: 1 March 1991

Andrew Baum

Discusses the attractions of property to institutional investors.Describes the evolution of future markets from forward contracts incommodity markets and financial and…

Abstract

Discusses the attractions of property to institutional investors. Describes the evolution of future markets from forward contracts in commodity markets and financial and stock market index futures to the current UK proposal for property index futures. Concludes that property professionals should make every effort to understand and develop the proposed market in a way which will benefit property investors most effectively.

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Journal of Property Valuation and Investment, vol. 9 no. 3
Type: Research Article
ISSN: 0960-2712

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Book part
Publication date: 9 September 2020

Fanhua Zeng, Yangfen Wu and Wei-chiao Huang

The market is a complex organism that has rich implications and essential stipulations. From the property right perspective, the market is a series of property rights…

Abstract

The market is a complex organism that has rich implications and essential stipulations. From the property right perspective, the market is a series of property rights, rules, and system arrangements (an aggregation of rights), which are constructed, owned, operated, and managed by the state and from which the government can benefit. The market property right is owned by the government (state). The costs of market property right include tangible (explicit) cost, system cost, human cost, and other cost components. The study on the cost components of market property right is conducive to establishing the principle of matching investment with ownership, matching investment with income, and integrating (unifying) cost with efficiency.

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Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-83867-363-5

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Article
Publication date: 1 December 1996

Graeme Newell and Kwong Wing Chau

Assesses the relationship between Hong Kong property company and commercial property market performance over 1984‐94. Finds that property companies provide a useful source…

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10354

Abstract

Assesses the relationship between Hong Kong property company and commercial property market performance over 1984‐94. Finds that property companies provide a useful source of transaction‐based information about changing property market fundamentals. The unique property market characteristics in Hong Kong mean that information is impounded into direct property series quickly, within one quarter of being impounded into indirect property company stock prices. Finds a common “pure” property element that influences both property company and property market returns. This results in investors capturing some portion of Hong Kong property market returns by investing in property companies, as well as achieving liquidity and portfolio diversification.

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Journal of Property Finance, vol. 7 no. 4
Type: Research Article
ISSN: 0958-868X

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Article
Publication date: 1 April 2001

Neil Turner and Matthias Thomas

The lack of portfolio‐based property indices in European property markets has led researchers to consider the use of notional property indices to determine the risk and…

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1868

Abstract

The lack of portfolio‐based property indices in European property markets has led researchers to consider the use of notional property indices to determine the risk and return rewards of investing in these markets. Owing to the computation assumptions underlying notional indices, in particular their inability to capture the prevalent lease structure in a market, they are unsuitable for this purpose, and investors devising European investment strategies around them need to be wary. This paper demonstrates the differences in property investment return delivery between notional and portfolio‐based indices, concentrating particularly on lease structures, and utilises data from the UK for this purpose. German lease structures are then considered in this context.

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Journal of Property Investment & Finance, vol. 19 no. 2
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 December 1996

Gerald R. Brown

Developing a successful strategy for investment in property is not easy. Research shows that abnormal returns, net of transactions costs, are difficult to achieve even…

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9117

Abstract

Developing a successful strategy for investment in property is not easy. Research shows that abnormal returns, net of transactions costs, are difficult to achieve even though there is a widespread belief amongst valuers that property markets are inefficient. This is compounded by the fact that reliable data on property performance is usually difficult to obtain. It is possible, however, to make use of publicly available data and use it in a way which may help investors guide their decisions. If abnormal returns are difficult to achieve on a consistent basis then the use of methods of analysis which give the investor some competitive advantage are worth pursuing. Although high returns have been achieved in the Hong Kong commercial property market this does not imply that those returns are abnormal in an economic sense; they may merely offer compensation for risk. By extracting equilibrium market values and implied prices from market data this paper examines abnormal returns earned by Hong Kong commercial property over the period 1985‐95 and shows that, in general, the market exhibits a high degree of efficiency. The least efficient sector was offices, which showed an average abnormal return of 1.73 per cent per quarter, although this was statistically indistinguishable from zero. Identifying when the market is under‐ and overpriced may improve the negotiating position of the investor. It may also be possible to develop similar buy‐sell strategies to exploit informational inefficiencies at the individual property level.

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Journal of Property Finance, vol. 7 no. 4
Type: Research Article
ISSN: 0958-868X

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Article
Publication date: 17 July 2007

Tien Foo Sing, Leiting Deng and Hong Wang

This paper aims to test the predictability of the three asset classes, namely direct property, bond and property stocks in Singapore.

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1160

Abstract

Purpose

This paper aims to test the predictability of the three asset classes, namely direct property, bond and property stocks in Singapore.

Design/methodology/approach

Using the generalized method of moment (GMM) estimation methodology, the authors first estimate the excess returns of assets on five instrumental variables and a constant term. Next the common risk factors are tested in three parts involving different portfolio of sample assets.

Findings

The empirical results shows that there are at most three common risk factors that can be used to predict the excess returns of six asset classes, that include four direct property assets, bonds and property stocks. The results also indicate that there are separate common risk premia that are priced in property stock and direct property markets, which indirectly reject the hypothesis that the two property markets are integrated.

Practical implications

The empirical results that reject the market integration between property and property stock markets imply that there are significant diversification benefits for holding both assets in investors' portfolios. The two property assets capture different risk premia in the markets.

Research limitations/implications

The GMM specifications that include five instrumental variables may not fully capture all risk information. Omission of other variables is, however, traded‐off against the parsimony of the model specification. More independent variables could be included in the future studies, and more asset classes could also be added to the tests.

Originality/value

The study provides alternative evidence to the test of market integration between property and property stocks in Singapore. It also verifies the earlier study in the USA that property and stock market effects could be separately priced by the market.

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Journal of Property Investment & Finance, vol. 25 no. 4
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 June 1997

Kim Hiang Liow

Investigates the investment performance of listed Singapore propertycompanies over the past 21 years. Risk‐adjusted performance for the companies remained inferior to…

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7079

Abstract

Investigates the investment performance of listed Singapore property companies over the past 21 years. Risk‐adjusted performance for the companies remained inferior to stock market performance. There is some evidence that the companies’ investment performance was not consistent over time. Also finds that property companies’ performance is tied to the stock and property markets. Finally, property stocks failed to provide hedges against observed, expected and unanticipated inflation.

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Journal of Property Finance, vol. 8 no. 2
Type: Research Article
ISSN: 0958-868X

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Article
Publication date: 13 April 2010

Heidi Falkenbach

This paper aims to identify different organisation modes for international property investments and analyse the rationales for selecting each mode.

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881

Abstract

Purpose

This paper aims to identify different organisation modes for international property investments and analyse the rationales for selecting each mode.

Design/methodology/approach

The paper reports the findings of an interview study conducted among international investors in the Finnish property market.

Findings

The study identifies four main organisation modes for international property investments, the selection of each mode being dependent of the investors' perception of the informational barriers and local nature of the property market. Most of the interviewed investors also apply the same strategy in other markets they invest in, and thus the selection of the organisation mode seems not to be very dependent on the characteristics of the investment market.

Research limitations/implications

The paper analyses the organisation modes and their selection criteria only in the Finnish market.

Practical implications

The study indicates that informational barriers are still of major concern for the investors entering foreign markets. Thus, activities contributing to lowering these barriers would be beneficial for those markets wanting to attract international property investments.

Originality/value

The study is the first to analyse the organisation modes of international property investors.

Details

Property Management, vol. 28 no. 2
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 2 September 2021

Quan Le Truong and Chung Yim Yiu

This study hypothesises that sale and leaseback (SLB) cap rate is lower than the market cap rate in emerging economies, and the difference is due to institutional cost and…

Abstract

Purpose

This study hypothesises that sale and leaseback (SLB) cap rate is lower than the market cap rate in emerging economies, and the difference is due to institutional cost and vacancy risk. This study aims to provide a novel SLB-Cap-Rate Model to assess the performance of SLB transaction (SLBT).

Design/methodology/approach

SLBT data are generally not publicly available in developing countries. This study collected data from 31 SLBTs by conducting semi-structured interviews with stakeholders in Vietnam in 2019. The market cap rates were collected from consultants' reports. The hypotheses are tested by three regression models.

Findings

The results show that the SLBT cap rate is significantly less than the market cap rate in Vietnam, and most of the cap rate discount can be explained by institutional and risk factors. This suggests that SLBT helps to reduce search costs for tenants and vacancy risks. It explains why SLBTs are becoming more common in emerging countries.

Practical implications

The study has a strong practical implication for assessing the performance of SLBT for both buyers and sellers. It introduces a novel model for analysing the cap rates and potential risks of SLBT to facilitate property investment decisions.

Originality/value

This paper is one of the studies that contains new knowledge on SLBs in a developing country specifically Vietnam.

Details

Journal of Property Investment & Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 21 October 2021

Olatoye Ojo, Daniel Ibrahim Dabara and Michael Tolulope Adeyemi Ajayi

This study examined the performance of commercial and residential real estate investments in the Ibadan property market to provide information for investment decisions.

Abstract

Purpose

This study examined the performance of commercial and residential real estate investments in the Ibadan property market to provide information for investment decisions.

Design/methodology/approach

The study used a mixed research design (qualitative and quantitative). Data were obtained employing in-depth interviews with randomly selected sixteen estate surveyors and valuers practising in the Ibadan property market. Data for the study were analysed using the phenomenological thematic content analysis. Similarly, data on rental and capital values were translated to income, capital and holding period returns. The Kwiatkowski–Phillips–Schmidt–Shin (KPSS) and Philip–Perron (PP) models were used for unit root analysis. Ordinary least square (OLS) regression model was used to test for inflation-hedging characteristics, and the Granger causality tests were carried out to analyse the causal relationship between the variables.

Findings

The study revealed that the Ibadan property market is still immature. For the return components, the study found that the Ibadan property market provided mean holding period returns of 10.82%, 14.31 and 8.29% for office, shop and residential property types, respectively. The study also revealed that the selected property types are perverse hedges against inflation. Similarly, the study showed a unidirectional causal relationship between inflation and returns on the selected property types.

Practical implications

Results of this study revealed the peculiar nature of the Ibadan property market; findings from the survey can be used as a guide for investment decisions by foreign and domestic investors. Shrewd investors can take advantage of the high returns provided by the real estate assets in the Ibadan property market (by investing in the property market) to obtain high returns and expand their investment portfolio.

Originality/value

This study is the first to examine, in an eclectic and comparative context, the performance of commercial and residential properties in the Ibadan property market from the perspective of its market maturity level, returns profile, as well as its inflation-hedging characteristics. Findings from the study will equip both individual and institutional investors with valuable information for investment decisions.

Details

Property Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-7472

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