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Article
Publication date: 8 February 2011

Rafal Wolski and Magdalena Zaleczna

The purpose of this paper is to identify possible reasons for insurance companies' scant interest in real estate as investment asset in Poland. The authors attempt to…

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Abstract

Purpose

The purpose of this paper is to identify possible reasons for insurance companies' scant interest in real estate as investment asset in Poland. The authors attempt to determine the impact of real estate investment on insurance companies' profitability.

Design/methodology/approach

After collecting the aggregated data about insurance companies' financial results for the period 2000‐2008 the authors analyzed the relationship between real estate investment and profitability indicators such as return on assets (ROA), return on equity (ROE) and return on sales (ROS). This approach reflected the shareholders' point‐of‐view. Subsequently, the same kind of analysis was carried out to investigate the impact of real estate investments on the insurance companies' return on technical activity (RTA) and return on investment activity (RIA). These indicators are meant to assess business performance from the point‐of‐view of insured persons.

Findings

The analysis revealed some negative correlations: real estate investments may reduce the profitability of insurance companies. If this is true, the unwillingness of insurance companies to purchase property would not be surprising. Yet, this conclusion should be accepted with caution.

Research limitations/implications

Due to the short study period and changes in legal classification of investment categories, the available data were very imperfect and the study results may not be perceived as undisputable, hence, it is felt that further research is needed.

Originality/value

The paper is original, as previously no such research has been conducted in Poland.

Details

Journal of Property Investment & Finance, vol. 29 no. 1
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 1 March 2003

Karl‐Werner Schulte

Investigates the role of investment and finance in real estate education and researches the programs of the conferences of the American Real Estate Society (ARES), the…

4001

Abstract

Investigates the role of investment and finance in real estate education and researches the programs of the conferences of the American Real Estate Society (ARES), the European Real Estate Society (ERES), held in the years 1999, 2000 and 2001, and the program of the International Real Estate Society (IRES) World Congress 2001. To give a structure to the different topics of hundreds of papers, the interdisciplinary approach is taken as a framework visualised by the “House of real estate economics”. The paper comes to the conclusion that real estate investment and finance play an important role which is supposed to decrease in the future.

Details

Property Management, vol. 21 no. 1
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 27 September 2022

Visar Hoxha and Islam Hasani

The overall purpose of the study is to identify the impact of heuristics, prospect theory biases and personality traits on property investment decision-making of rank and…

Abstract

Purpose

The overall purpose of the study is to identify the impact of heuristics, prospect theory biases and personality traits on property investment decision-making of rank and file individuals in Kosovo, with a concentration in Prishtina, which is the city with the largest number of investors and property transactions in Kosovo.

Design/methodology/approach

The present study used quantitative research with the questionnaire used as a research instrument. The questionnaire survey was conducted with 1,209 rank and file property investors in Prishtina, Kosovo. The sampling method used in this research was stratified random sampling.

Findings

The study finds that heuristics, prospect theory biases and personality traits as a whole model affect investment decision-making in Prishtina, Kosovo. Nevertheless, the study finds that not all dimensions of the constructed research model (heuristics, the prospect theory and personality) affect the property investment decision-making in Prishtina at the same level. Whereas prospect theory biases (regret aversion, framing and self-control) seem to very strongly influence property investment decision-making of rank and file investors in Prishtina, personality traits (conscientiousness, neuroticism and openness to new experiences) seem not to affect the real estate investment decision-making. Finally, heuristics biases also strongly influence the real estate investment decision-making with a strong statistically significant explanatory power but not to the same degree as prospect theory biases.

Practical implications

The present study contributes toward the understanding of the role that is played by heuristics, prospect theory biases and personality traits in Kosovo's property investment industry. More importantly, the implication of the results of the present study is that it goes some way toward enhancing understanding of heuristic and prospect theory-driven biases and their influence on property investment decision-making in a developing economy. The present study paves the way to further analyze why personality traits do not influence property investment decision-making in Kosovo.

Originality/value

The present study is the first quantification of the impact of heuristics, prospect theory biases and personality traits on the investment decision-making of rank and file individuals in Prishtina, Kosovo.

Details

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

Keywords

Book part
Publication date: 27 June 2014

C. Sherman Cheung and Peter Miu

Real estate investment has been generally accepted as a value-adding proposition for a portfolio investor. Such an impression is not only shared by investment

Abstract

Real estate investment has been generally accepted as a value-adding proposition for a portfolio investor. Such an impression is not only shared by investment professionals and financial advisors but also appears to be supported by an overwhelming amount of research in the academic literature. The benefits of adding real estate as an asset class to a well-diversified portfolio are usually attributed to the respectable risk-return profile of real estate investment together with the relatively low correlation between its returns and the returns of other financial assets. By using the regime-switching technique on an extensive historical dataset, we attempt to look for the statistical evidence for such a claim. Unfortunately, the empirical support for the claim is neither strong nor universal. We find that any statistically significant improvement in risk-adjusted return is very much limited to the bullish environment of the real estate market. In general, the diversification benefit is not found to be statistically significant unless investors are relatively risk averse. We also document a regime-switching behavior of real estate returns similar to those found in other financial assets. There are two distinct states of the real estate market. The low-return (high-return) state is characterized by its high (low) volatility and its high (low) correlations with the stock market returns. We find this kind of dynamic risk characteristics to play a crucial role in dictating the diversification benefit from real estate investment.

Details

Signs that Markets are Coming Back
Type: Book
ISBN: 978-1-78350-931-7

Keywords

Abstract

Details

The Savvy Investor's Guide to Building Wealth through Alternative Investments
Type: Book
ISBN: 978-1-80117-135-9

Article
Publication date: 29 March 2022

Graeme Newell and Muhammad Jufri Marzuki

Within the context of ESG (Environment, Social and Governance), environmental sustainability has taken on increased global importance in recent years. Similarly, real

Abstract

Purpose

Within the context of ESG (Environment, Social and Governance), environmental sustainability has taken on increased global importance in recent years. Similarly, real estate investment managers in developing their global real estate investment portfolios need a fuller understanding of the ESG and environmental sustainability dimensions of these global real estate markets for more informed real estate investment decisions. Using the JLL GRETI sustainability sub-index, this paper examines the environmental sustainability transparency status of 99 global real estate markets over 2016–2020 and explores various strategic issues regarding ESG and environmental sustainability; particularly the critical issues relating to climate risk mitigation, climate resilience and zero-carbon. The current status of environmental sustainability in these 99 real estate markets is assessed, with areas for “best practice” improvement identified to the benefit of real estate investment managers; particularly the improvements needed in ESG to support real estate investment in the emerging real estate markets.

Design/methodology/approach

The JLL GRETI sustainability sub-index is analysed to examine strategic issues relating to environmental sustainability transparency. 99 real estate markets are assessed globally for a range of critical ESG issues over 2016–2020. Differences between the developed and emerging real estate markets are highlighted.

Findings

Considerable variation was seen in the ESG and environmental sustainability practices, procedures and frameworks across these 99 real estate markets. This was particularly evident amongst the emerging real estate markets. Compared to the other five dimensions for real estate market transparency, environmental sustainability was seen to be well behind these other dimensions in most markets. Progress has been made in recent years, but it has been slow and steady rather than at a dynamic level. Clearly, more is needed globally to enhance the stature of environmental sustainability in the context of an increasing focus on ESG and specifically on climate risk mitigation, climate resilience and zero-carbon in real estate investment.

Practical implications

With ESG and environmental sustainability taking on increased importance across the international real estate markets, it is important that real estate fund managers have a full understanding of the ESG and environmental sustainability status of these real estate markets where they may be considering real estate investment opportunities; this includes both the developed and emerging real estate markets. This is essential to ensure future capital raising for new funds, as well as supporting the global ESG agenda by the real estate investment community. Specific strategies are also identified for emerging real estate markets to improve their environmental sustainability practices and ESG status.

Originality/value

This is the first paper to use the JLL GRETI sustainability sub-index to assess the environmental sustainability status of 99 real estate markets globally; providing strategic insights for real estate investment managers as they develop their global real estate portfolios and more fully embrace the challenges of ESG and environmental sustainability in the real estate space going forward. Specific strategies are clearly identified for all markets to improve their environmental sustainability ratings to the benefit of both global real estate investment and the broader communities.

Article
Publication date: 12 January 2022

Olawumi Fadeyi, Stanley McGreal, Michael J. McCord, Jim Berry and Martin Haran

The London office market is a major destination of international real estate capital and arguably the epicentre of international real estate investment over the past…

Abstract

Purpose

The London office market is a major destination of international real estate capital and arguably the epicentre of international real estate investment over the past decade. However, the increase in global uncertainties in recent years due to socio-economic and political trends highlights the need for more insights into the behaviour of international real estate capital flows. The purpose of this study is to evaluate the influence of the global and domestic environment on international real estate investment activities within the London office market over the period 2007–2017.

Design/methodology/approach

This study adopts an auto-regressive distributed lag approach using the real capital analytics (RCA) international real estate investment data. The RCA data analyses quarterly cross-border investment transactions within the central London office market for the period 2007–2017.

Findings

The study provides insights on the critical differences in the influence of the domestic and global environment on cross-border investment activities in this office market, specifically highlighting the significance of the influence of the global environment in the long run. In the short run, the influence of factors reflective of both the domestic and international environment are important indicating that international capital flows into the London office market is contextualised by the interaction of different factors.

Originality/value

The authors provide a holistic study of the influence of both the domestic and international environment on cross-border investment activities in the London office market, providing more insights on the behaviour of global real estate capital flows.

Details

Journal of European Real Estate Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-9269

Keywords

Article
Publication date: 13 September 2021

Moses Munyami Kinatta, Twaha Kigongo Kaawaase, John C. Munene, Isaac Nkote and Stephen Korutaro Nkundabanyanga

This study examines the relationship between investor cognitive bias, investor intuitive attributes and investment decision quality in commercial real estate in Uganda.

Abstract

Purpose

This study examines the relationship between investor cognitive bias, investor intuitive attributes and investment decision quality in commercial real estate in Uganda.

Design/methodology/approach

A cross-sectional research survey was used in this study, and data were collected from 200 investors of commercial real estate in Uganda using a structured questionnaire. Hierarchical regression analysis was used to test the hypotheses derived under this study.

Findings

The results indicate that investor cognitive bias and investor intuitive attributes are positive and significant determinants of investment decision quality in commercial real estate. In addition, the two components of Investor cognitive bias (framing variation and cognitive heuristics) are positive and significant determinants of investment decision quality, whereas mental accounting is a negative and significant determinant of investment decision quality. For investor intuitive attributes, confidence degree and loss aversion are positive and significant determinants of investment decision quality, whereas herding behavior is a negative and significant determinant of investment decision quality in commercial real estate in Uganda.

Practical implications

For practitioners in commercial real estate sector should emphasize independent evaluation of investment opportunities (framing variation), simplify information regarding investments (Cognitive heuristics), believe in own abilities (Confidence degree), be risk averse (loss aversion) and avoid making decisions based on subjective visual mind (mental accounting) and group think/herding in order to make quality investment decisions. For policymakers, the study has illuminated factors such as provision of reliable information that ought to be taken into account when promulgating policies for regulation of the commercial real estate sector. This will help investors to come up with investment decisions which are plausible.

Originality/value

Few studies have focused on investor cognitive bias and investor intuitive attributes on investment decision quality in commercial real estate. This study is the first to examine the relationship, especially in the commercial real estate sector in a developing country like Uganda.

Details

Journal of Property Investment & Finance, vol. 40 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

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. 40 no. 2
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 1 September 2000

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property…

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Abstract

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property Management Volumes 8‐17; Structural Survey Volumes 8‐17.

Details

Facilities, vol. 18 no. 9
Type: Research Article
ISSN: 0263-2772

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