Search results

1 – 10 of over 1000
Article
Publication date: 7 January 2022

Woei Chyuan Wong and Joseph T.L. Ooi

This paper examines the evolution and impact of property development activities on REIT performance. The paper provides insights on whether REITs should venture into…

Abstract

Purpose

This paper examines the evolution and impact of property development activities on REIT performance. The paper provides insights on whether REITs should venture into property development in addition to their core-business of holding income producing properties.

Design/methodology/approach

This paper charts and highlights the evolution of development activities of US REITs from 1992 to 2020. The Tobin's Q of property developing REITs and non-property developing REITs are compared using univariate analysis.

Findings

Development activities of US REITs grew dramatically during the run up to global financial crisis (GFC) in 2008. The level of development activities has dropped since the GFC and it has not return to its pre-crisis peak. In comparison, development activities of listed property investment companies and homebuilders are less volatile over the same period. The data reveals that property developing REITs enjoy significantly higher Tobin's Q as compared to their non-developing counterparts.

Practical implications

Our graphical evidence from a market without development restriction suggests that development restriction in other REIT regimes has it value in limit REITs' excessive risk-taking tendency during a booming property market. The positive relationship between Tobin's Q and the existence of property development activity support the value creation of this business activity to REITs.

Originality/value

This paper raises overbuilding as a potential cause of the underperformance of the REIT sector during the GFC.

Details

Journal of Property Investment & Finance, vol. 40 no. 3
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 1 December 2004

Phillip S. Scherrer

As equity markets decline, bonds and REITs (Real Estate Investment Trusts) become more appealing to investors. Although REITs stocks are equity based their continual…

3029

Abstract

As equity markets decline, bonds and REITs (Real Estate Investment Trusts) become more appealing to investors. Although REITs stocks are equity based their continual return is more bond‐like in nature. This article addresses the analyses process for investing in real estate based equities.

Details

Corporate Governance: The international journal of business in society, vol. 4 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 7 March 2016

Bill Dimovski

A variety of papers have analyzed the underpricing of REIT IPOs or property company IPOs. The purpose of this paper is to compare the two sectors and examines differences…

621

Abstract

Purpose

A variety of papers have analyzed the underpricing of REIT IPOs or property company IPOs. The purpose of this paper is to compare the two sectors and examines differences in the underpricing of the two types of IPOs.

Design/methodology/approach

An OLS regression is used to identify factors influencing the underpricing of A-REIT and property company IPOs from 1994 until 2014.

Findings

This study finds that A-REIT IPOs have a significantly lower underpricing on average than Australian property company IPOs. The time taken to list appears to influence the underpricing of both A-REIT IPOs and property company IPOs, in that issues that are filled more quickly have higher underpricing but with the magnitude of the impact being less for A-REITs. The sentiment toward the stock market also appears to impact on the underpricing of A-REIT and property company IPOs again with the magnitude of the impact being less for A-REITs.

Practical implications

The paper provides information to new A-REIT and property company issuers, underwriters and investors.

Originality/value

The study is the first to compare and examine the differences in the underpricing of both REITs and property companies in the one country over the same time period.

Details

Journal of Property Investment & Finance, vol. 34 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 1 August 2016

Stephen Lee

The purpose of this paper is to empirically examine the effect on US stock, bond and real estate investment trust (REIT) prices triggered by the US Federal Reserve…

Abstract

Purpose

The purpose of this paper is to empirically examine the effect on US stock, bond and real estate investment trust (REIT) prices triggered by the US Federal Reserve Chairman Ben Bernanke’s announcement of a possible intent to unwind, or taper, quantitative easing (QE). In particular, the author assessed whether the effect of the “Taper Tantrum” was fundamental or financial on financial markets.

Design/methodology/approach

The methodology used to determine whether the effect of the “Taper Tantrum” was fundamental or purely financial is that suggested by French and Roll (1986) as extended by Tuluca et al. (2003). The analysis is based on daily data for large cap stocks, small cap stocks, long-term bonds and REITs for 18 months before Ben Bernanke’s announcement and for 18 months after the announcement.

Findings

The results show that the “Taper Tantrum” had a fundamental, rather than a financial effect on all asset classes, especially so for REITs.

Practical implications

The author also found that in the post-taper period following Ben Bernanke’s announcement the correlation of REITs with stocks decreased compared with pre-taper period, whereas the correlation of REITS with bonds increased substantially. In other words, the “Taper Tantrum” had a profound effect on the risk/return benefits of including REITs in the US mixed-asset portfolio.

Originality/value

This is the first paper to examine the effect of the “Taper Tantrum” on REITs.

Details

Journal of Property Investment & Finance, vol. 34 no. 5
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 4 December 2020

David H. Roberts, Ettore A. Santucci, Mark Schonberger and Peter W. Lavigne

Over 15 years ago Goodwin created the first open-ended, non-traded real estate investment trust (REIT) with regular sales and redemptions at net asset value (“NAV REIT”)…

Abstract

Purpose

Over 15 years ago Goodwin created the first open-ended, non-traded real estate investment trust (REIT) with regular sales and redemptions at net asset value (“NAV REIT”). While NAV REITs are now well established, there is still room for improvement.

Design/methodology/approach

We traced the evolution of the NAV REIT’s innovative, investor-friendly features – transparent valuation to strike NAV, liquidity via redemption at NAV per share, indefinite life, lower/simpler selling and management fees, share classes with different upfront loads and trailing distribution fees.

Findings

To improve the liquidity feature of NAV REITs, share classes could be used to lower the drag on performance and match available liquid assets with expected redemption requests. The goal: balance inflows and outflows, optimize portfolio construction, and better safeguard liquidity.

Practical implications

One need not look far for the dark side of liquidity in open-ended real estate funds. The UK experience with regulated property funds is a painful object lesson. There is a better way: while traditional non-traded REITs were designed and marketed for investment by retail investors, NAV REITs appeal to a diverse range of investors, and share classes could be enhanced to offer both a menu of selling loads and a menu of liquidity and dividend-rate options to produce a smooth curve blending cost and time.

Originality/value

Innovation in structuring real estate investment vehicles has broadened choices for all and the NAV REIT is flexible, scalable, open-ended and cost-efficient. Fund sponsors, fund managers, financial advisors, investors and even regulators could find food for thought in our analysis.

Details

Journal of Investment Compliance, vol. 21 no. 2/3
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 3 February 2012

Vivek Sah and Philip Seagraves

The purpose of this paper is to consider the operating performance of real estate investment trust initial public offerings (REIT IPOs) as a measure to find additional…

1317

Abstract

Purpose

The purpose of this paper is to consider the operating performance of real estate investment trust initial public offerings (REIT IPOs) as a measure to find additional evidence of market timing in this sector.

Design/methodology/approach

A sample of REIT IPOs is analyzed to determine the relationship between IPO clustering and several measures of REIT operating performance.

Findings

The results suggest that timing the market by marginal firms in the REIT sector would be difficult, due to the transparent nature of REITs, leading to lower level of informational asymmetry between REIT managers and investors. Consistent with results found for non‐REIT firms in industry clusters, no evidence was found of a significant difference between the operating performance of REITs which are part of an IPO cluster and those that went public outside of the identified cluster periods.

Practical implications

This study shows that REIT market is efficient and would not allow REIT managers to time the market.

Originality/value

Using stringent measures of identifying REIT IPO clusters and operating performance as a measure to gauge market timing, this study differs from previous studies and provides additional and robust evidence of transparent nature of REITs that leads to reduced information asymmetry between managers and investors. This result supports the theory that REITs are more transparent and thus less likely to be over‐invested during IPO cluster periods.

Article
Publication date: 9 July 2020

Omokolade Akinsomi

Real estate investment trusts (REITs) are historically considered as attractive assets to investors particularly as the underlying assets are properties which are…

3151

Abstract

Purpose

Real estate investment trusts (REITs) are historically considered as attractive assets to investors particularly as the underlying assets are properties which are income-producing. REITs also distribute substantial amount of profits as dividends to shareholders. Stephen and Simon (2005) find that REITs in a mixed asset portfolio of stocks and bonds enhance returns and reduce risk. This paper examines the role a pandemic (COVID-19) plays in the performance of global REITs index and REIT sectors.

Design/methodology/approach

To examine the effects of COVID-19 on REITs, the year-to-date (YTD) returns of global returns index and REITs sectors in the United States are observed and a comparative analysis is employed from January 2020 to May 2020.

Findings

Based on a three-month return ending 22 May 2020, FTSE EPRA NAREIT index is the biggest loser at −31.83% whilst the FTSE EPRA Asia–Pacific index has the lowest loss at −23.20%. The author examines YTD returns which show disparities on the effect of COVID-19 on REIT sectors. The US market is examined; most REIT sectors suffered big losses as at April 2020; the analysis reveals YTD returns for the top three REIT sector losers are lodging/resort REITs (−45.81%), retail REITs (−41.16%) and office REITs (−22.63%). Data centre REITs are the only sector REITs with positive returns at 17.66%.

Practical implications

Most sector REITs during the pandemic have lost considerable value based on YTD returns as at May 2020. Flight to quality is expected during this uncertain period to REITs such as data REITs, grocery-anchored REITs and storage REITs. These REITs are not as adversely affected by COVID-19 in comparison to other REITs.

Originality/value

This paper identified the impact of COVID-19 on the performance of global REITs and US sector REITs during the periods from January 2020 to May 2020.

Details

Journal of Property Investment & Finance, vol. 39 no. 1
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 22 September 2022

Xiaer Xiahou, Zirui Li, Jian Zuo, Ziying Wang, Kang Li and Qiming Li

Real estate investment trusts (REITs) have shown great potential in addressing the current contradiction between underinvestment and sustainable development of urban…

Abstract

Purpose

Real estate investment trusts (REITs) have shown great potential in addressing the current contradiction between underinvestment and sustainable development of urban regeneration in China, as well as in further facilitating the transformation and upgrading of China's urban development. In this regard, this study aims to investigate critical success factors (CSFs) and explore the relationships among these factors, and serve as a reference to provide recommendations and strategies for the successful implementation and sustainable development of urban regeneration REITs.

Design/methodology/approach

In this study, an integrated total interpretive structural modeling–matriced impact croises multiplication applique (TISM–MICMAC) approach using the TISM technique and MICMAC analysis is then implemented to explore the relationships among CSFs, demonstrate the hierarchical structure and classify these factors into clusters based on calculated driving powers and dependence.

Findings

This study has determined a final list of 11 CSFs through literature review and expert survey. The TISM model demonstrates a six-level hierarchical structure encompassing the influence transmission paths of CSFs, in which the most significant factors and links are established, while the MICMAC analysis further classifies CSFs into four clusters as a complement for the findings of the TISM technique.

Practical implications

This study offers practical implications for governments, individual and institutional investors, REITs and property managers, and other stakeholders concluded in urban regeneration REITs. The final list of determined CSFs can serve as the decision points for management and control of the implementation processes, while the findings of the TISM–MICMAC approach can be a significant reference to provide strategies for optimization and enhancement of urban regeneration REITs.

Originality/value

This study is a novel attempt to use both the TISM technique and MICMAC analysis to investigate CSFs for the implementation of urban regeneration REITs, and to address the theoretical and methodological research gaps in the existing literature.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 8 August 2022

Srijana Baral and Bin Mei

The purpose of this study is to examine the return sensitivity of public farmland and timberland real estate investment trusts (REITs) to private-equity farmland…

Abstract

Purpose

The purpose of this study is to examine the return sensitivity of public farmland and timberland real estate investment trusts (REITs) to private-equity farmland, timberland and real estate, long-term corporate bonds and large- and small-cap stocks. The study also examines time-dependent contributions of selected asset classes to farmland and timberland REIT volatility.

Design/methodology/approach

The authors use a multi-factor asset pricing model under a seemingly unrelated regression framework to evaluate farmland and timberland REIT returns, and a state-space model with the Kalman filter to evaluate the time-dependent contributors of farmland and timberland REIT volatility. The authors first perform orthogonalized regressions to obtain pure independent factors, and then decompose volatility into individual asset components.

Findings

Significant loadings on financial assets are found for both farmland and timberland REITs, suggesting that they are generally driven by some common state variables. Large-cap stocks are found to be the major contributor of farmland and timberland REIT volatility, despite some differing patterns over time.

Originality/value

Empirical analysis of farmland REIT is very scarce. The authors compare the risk-return characteristics of farmland and timberland REITs under a state-space framework with the Kalman filter. This study can improve the understanding of the roles of farmland and timberland REITs in a multi-asset portfolio.

Details

Agricultural Finance Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 21 July 2022

Monsurat Ayojimi Salami, Harun Tanrivermiş and Yeşim Tanrivermiş

This study aims to examine the performance and volatility of Turkey Real Estate Investment Trusts (Turkish REITs) as the world is adjusting to the new normal situation in…

Abstract

Purpose

This study aims to examine the performance and volatility of Turkey Real Estate Investment Trusts (Turkish REITs) as the world is adjusting to the new normal situation in every aspect of REITs' business activities.

Design/methodology/approach

The prices of REITs were acquired from 26 Turkish REITs in this study, but owing to autocorrelation difficulties, 14 Turkish REITs were employed in the analysis. The ten-year long-term bond of the Turkish Government was also utilized and the period of data obtained was based on availability. The performance of Turkish REITs was evaluated using Sharpe's ratio and Treynor's ratio, and the volatility was assessed using MGARCH-BEKK.

Findings

The authors found out that Turkish REITs are constantly underperforming and the REITs' returns remain highly volatile and persistent. In addition, findings showed evidence of volatility clustering and the asymmetric impact of shocks. This study further revealed the uniqueness of each of the Turkish REITs due to the lack of evidence of multicollinearity.

Research limitations/implications

However, the limitation of this study is the constraint in obtaining more macro-economic variables of more than ten-years of Turkey's Government bond and the study focused mainly on Turkish REITs.

Practical implications

The result suggests that since Turkish REITs are not mandatory to payout 90% of taxable earnings as dividends, high performance and an appropriate risk management approach are expected. The need for timely revealing performance of T-REITs and associated uncertainty may trigger better performance as discussed in the relationship between disclosure and performance which is recently emphasized in a recent study by Koelbl (2020). With current performance and associated uncertainty in Turkish REITs, the need to protect Turkish REITs investors is highly essential. The result further educates REIT investors that diversification benefits of REITs tend to reduce in extremely risky situations.

Originality/value

This is the first study in the context of Turkish REITs that comprehensively integrated market capitalization of REITs and simultaneous evaluation of performance and the volatility of the Turkish REITs as the world adjusts to the new normal.

Details

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

Keywords

1 – 10 of over 1000