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Article
Publication date: 23 June 2020

Graeme Newell

The Asian real estate markets have grown considerably in recent years and have taken on increased investment importance, particularly with significant developments in the…

Abstract

Purpose

The Asian real estate markets have grown considerably in recent years and have taken on increased investment importance, particularly with significant developments in the emerging markets in Asia. This paper assesses the opportunities for more research on the Asian real estate markets, by highlighting the significance of Asia real estate, the drivers behind this growth and the unique opportunities this presents for high-quality real estate research, by both local researchers and their international colleagues. Strategies for delivering this research agenda are also identified.

Design/methodology/approach

This research is based on a thorough understanding of the Asian real estate markets, based on my own research agenda, personal interactions, insights and extensive discussions with real estate leaders in the Asian markets. This is supported by a clear understanding of the real estate research opportunities in the Asian markets and the strategies needed to deliver this research agenda in an effective manner.

Findings

A range of real estate research areas are identified to increase the level of Asian real estate research. This sees research opportunities around key areas such as market dynamics, real estate investment vehicles, alternate real estate sectors, infrastructure and sustainability. Strategies for expanding this level of research for both local and international real estate researchers are also identified.

Practical implications

With the Asian real estate markets taking on more importance with many international real estate investors, it is important to see more high-quality research into these dynamic real estate markets. This research will see a fuller understanding of these Asian real estate markets to enable more informed real estate investment decision-making.

Originality/value

The need for more high-quality research into the Asian real estate markets is clearly presented, with enabling strategies to achieve this agenda identified. This will see expanded research opportunities to critically research these unique real estate markets and produce high-quality research publications.

Details

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

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Article
Publication date: 29 July 2014

Lulu Shui

– The purpose of this paper is to attempt the construct of a Centipede Game network model of investment in real estate market based on grey integration and forwards induction.

Abstract

Purpose

The purpose of this paper is to attempt the construct of a Centipede Game network model of investment in real estate market based on grey integration and forwards induction.

Design/methodology/approach

The investment process of decision making in the real estate market is a multi-agent-stage dynamic process. The behavior of the game are interdependent and the ultimated equilibrium is an outcome of every the game adjust themselves comprehensively in certain conditions. The paper constructs a Centipede Game network model of investment in real estate market based on grey integration and forwards induction, regulars the method framework based on grey integration and forwards induction.

Findings

The results verifies that the validity of Centipede Game network model by taking N's real estate market as an example.

Practical implications

Most of the existing real estate market game researches study it from the view of pairwise game or one-to-many game, in fact, the game tend to be developed in the form of a network. And the paper puts forward Centipede Game network model based on the mode of players game in real estate market.

Originality/value

The paper succeeds in providing a new and systematic framework of studying the real estate market game by using game theory.

Details

Grey Systems: Theory and Application, vol. 4 no. 2
Type: Research Article
ISSN: 2043-9377

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Article
Publication date: 1 April 2004

Philip M. Booth and Gianluca Marcato

Despite improvements in certain countries in recent years, the provision of performance information on the direct real estate market still suffers from a lack of…

Abstract

Despite improvements in certain countries in recent years, the provision of performance information on the direct real estate market still suffers from a lack of timeliness and reliability. The latter problem is particularly an issue for higher‐frequency data provision. This paper investigates whether there is information from the indirect market that might be useful in helping us understand better the direct real estate market. Direct real estate indices do not measure the performance of underlying transactions prices properly because they are based on valuations – and therefore may be subject to valuation smoothing. Indirect real estate indices do not properly measure the value investors put on the underlying assets of real estate companies because real estate companies are geared. Compares appropriately adjusted indices, and shows that there is information in indirect index returns that can usefully help us understand the performance of the direct market and an index is produced of de‐geared monthly real estate share returns for the UK.

Details

Journal of Property Investment & Finance, vol. 22 no. 2
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 March 2013

Tien Foo Sing and Zhuang Yao Tan

Understanding correlations between stock and direct real estate returns, which is the key factor that determines diversification benefits in a portfolio, helps formulate…

Abstract

Purpose

Understanding correlations between stock and direct real estate returns, which is the key factor that determines diversification benefits in a portfolio, helps formulate and implement better investors' asset allocation and risk management strategies. The past studies find that direct real estate returns have a low unconditionally (long‐run) correlation with the returns of equities. However, assuming that such correlation is constant throughout all periods is implausible. The purpose of this study is to test the time‐varying correlations of returns between general stocks and direct real estate.

Design/methodology/approach

This study uses the dynamic conditional correlation (DCC) model, which is a simplified version of the multivariate generalised autoregressive conditional heteroskedasticity (GARCH) model, proposed by Engle to test the time‐varying correlations between stock and direct real estate returns in six markets, which include the USA, the UK, Ireland, Australia, Hong Kong and Singapore.

Findings

The empirical results show significant time‐varying effects in the conditional covariance between stock returns and direct real estate returns. The results vary across different real estate sub‐sectors, and across different countries. It is observed that the conditional covariance increases in the boom markets, but becomes weaker in the post‐crisis periods. The authors observed significant jumps in the conditional covariance between the two asset markets in Singapore and Hong Kong in the post‐1977 Asian Financial crisis periods and in the post‐2007 US Sub‐prime crisis periods.

Originality/value

The past studies find that direct real estate returns have a low unconditionally (long‐run) correlation with the returns of equities. However, assuming that such correlation is constant throughout all periods is implausible. This study fills in the gap by using the dynamic conditional correlation models to allow for time‐varying effects in the correlations between stock and real estate returns.

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Article
Publication date: 10 July 2009

Seow Eng Ong and Kah Hwa Ng

While the development of real estate derivative contracts has important implications for real estate as an asset class, it has not been widely accepted in Asia. This paper…

Abstract

Purpose

While the development of real estate derivative contracts has important implications for real estate as an asset class, it has not been widely accepted in Asia. This paper aims to examine the issues involved in developing the real estate derivative market for Singapore.

Design/methodology/approach

The concept of real estate derivatives is reviewed. The limitations to the extant real estate index are discussed. Different approaches to constructing real estate indices are discussed in particular reference to the features of the Singapore real estate market.

Findings

The Singapore residential market is dominated by public housing, heterogeneity and relatively low turnover. The applicability of repeat sales approach may not be well suited. Geostatistical models appear promising. The commercial real estate market suffers from even lower turnover. The most appropriate commercial real estate index could be similar to that offered by IPD. Several issues were also highlighted. First, the index must pass the stringent scrutiny of academia and experts. Second, the index must be well understood and accepted by the industry. Third, the index must be published in a timely fashion and without biases. Fourth, there must be a trustworthy producer of the index.

Research limitations/implications

For an index to be accepted, it must satisfy the issue of fungibility. International investors looking for exposure or hedging strategies are likely to be familiar with established methodologies such as the repeat sales and appraisal‐based approaches.

Practical implications

Market acceptability of RED. If the experience in Europe is anything to go by, this is not an insurmountable issue that cannot be addressed with education and knowledge dissemination.

Originality/value

While real estate derivatives have immense potential and a tremendous growth in its development in Europe has been witnessed, it is clear that the real estate derivative industry is in its infancy. The paper examines the issues peculiar to Singapore with regard to the establishment of real estate derivative contracts. The paper is of interest to policy makers and industry practitioners.

Details

Journal of Property Investment & Finance, vol. 27 no. 4
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 8 May 2009

Éamonn D'Arcy and Paloma Taltavull

The purpose of this paper is to provide a profile of the structure of real estate education provision in Europe, its key recent drivers and some ideas for its future development.

Abstract

Purpose

The purpose of this paper is to provide a profile of the structure of real estate education provision in Europe, its key recent drivers and some ideas for its future development.

Design/methodology/approach

The paper provides an analysis of recent trends in provision based on the European course accreditation data provided by the Royal Institution of Chartered Surveyors (RICS). The structure of provision is examined within the context of the significant changes which have taken place in the structure of European real estate markets as a means of identifying its key drivers. The analysis goes on to consider the opportunities presented for the future development of provision by two important initiatives the “Bologna Process” and the “European Real Estate Society Education Seminar”.

Findings

There has been considerable expansion in the provision of real estate education in Europe in recent years. The postgraduate level both full‐time and part‐time has been established as the dominant mode of provision with a business school setting as an increasingly important academic context. The two initiatives examined have the potential to contribute to the development of a truly pan‐European approach to real estate education.

Originality/value

The paper provides the first systematic review of real estate education provision in Europe directly related to changes in the structure of real estate markets. It provides educators which some ideas on how to shape future provision in particular though the development of key stakeholder relationships across Europe.

Details

Journal of European Real Estate Research, vol. 2 no. 1
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 8 June 2015

Dale Domian, Rob Wolf and Hsiao-Fen Yang

The home is a substantial investment for most individual investors but the assessment of risk and return of residential real estate has not been well explored yet. The…

Abstract

Purpose

The home is a substantial investment for most individual investors but the assessment of risk and return of residential real estate has not been well explored yet. The existing real estate pricing literature using a CAPM-based model generally suggests very low risk and unexplained excess returns. However, many academics suggest the residential real estate market is unique and standard asset pricing models may not fully capture the risk associated with the housing market. The purpose of this paper is to extend the asset pricing literature on residential real estate by providing improved CAPM estimates of risk and required return.

Design/methodology/approach

The improvements include the use of a levered β which captures the leverage risk and Lin and Vandell (2007) Time on Market risk premium which captures the additional liquidity risk of residential real estate.

Findings

In addition to presenting palatable risk and return estimates for a national real estate index, the results of this paper suggest the risk and return characteristics of multiple cities tracked by the Case Shiller Home Price Index are distinct.

Originality/value

The results show higher estimates of risk and required return levels than previous research, which is more consistent with the academic expectation that housing performs between stocks and bonds. In contrast to most previous studies, the authors find residential real estate underperforms based on risk, using standard financial models.

Details

Managerial Finance, vol. 41 no. 6
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 18 February 2004

Ranney Ramsey

This article identifies the concept of market value as a standardizing concept that coordinates the actions of market participants in relatively inefficient real estate

Abstract

This article identifies the concept of market value as a standardizing concept that coordinates the actions of market participants in relatively inefficient real estate markets. The paper also identifies different levels of discourse that reflect the organizational/institutional complexity of the real estate appraisal profession. The standardizing effect of market value includes a cognitive and fiduciary component. Using this framework, the paper traces the influence of Richard T. Ely’s institutional economics – and its legacy in the form of the research program of Urban Land Economics at the University of Wisconsin – on the formation and development of the standards of appraisal and ethical practice. This complexity is traced historically from the early part of the 19th century to the formation of the professional organizations and the establishment of their standards, and also through a series of reform efforts in the 1960s and 1980s that were articulated in the academic community. The paper illustrates the manner in which Institutional Economics has been influential in the continuing development of the real estate appraisal profession and suggests reasons for its continuing relevance.

Details

Wisconsin "Government and Business" and the History of Heterodox Economic Thought
Type: Book
ISBN: 978-0-76231-090-6

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Book part
Publication date: 28 August 2013

Gary A. Patterson

The real estate market has evolved significantly over the past 10 years and has experienced rapid growth throughout the world in its various forms. Many emerging countries…

Abstract

The real estate market has evolved significantly over the past 10 years and has experienced rapid growth throughout the world in its various forms. Many emerging countries witnessed the significant growth in their commercial real estate markets that became a stable sector of their economies. These countries, after developing a reliable commercial real estate base within their economies subsequently developed real estate financial markets. The growth of the real estate investment trusts, REITs, markets in many countries within the past decade helped attract global capital that facilitated additional investments in local real estate developments. Significantly, this period of time may have witnessed a higher degree of integration of real estate with the broader financial markets due in large part to the securitization of mortgages. Yet the general real estate market was also impacted in many parts of the world with rising prices and subsequent price collapses. This section focuses on the various areas of the global real estate market and the changes that it has encountered as examined by researchers of real estate. This chapter also examines the recent trends in global real estate markets and explores how these changes have affected the broader investment community.

Details

International Financial Markets
Type: Book
ISBN: 978-1-78190-312-4

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Article
Publication date: 24 August 2020

Martin Edward Haran, Daniel Lo, Michael McCord, Peadar Davis and Lay Cheng Lim

The purpose of this paper is to test the extent to which company-specific attributes including market capitalisation, capital structure and investment focus impact upon…

Abstract

Purpose

The purpose of this paper is to test the extent to which company-specific attributes including market capitalisation, capital structure and investment focus impact upon the performance of European listed real estate companies. Enhanced understanding of firm-level performance drivers is important for investors in order to diversify their investment portfolios and to mitigate company-specific risks at different points in the real estate cycle.

Design/methodology/approach

The study centres on six key listed European real estate markets selected on the basis of market capitalisation, diversity, transparency and maturity. A series of statistical tests are undertaken using EPRA and Bloomberg data for the period of 2007–2017 using 113 listed property companies, all of whom were contemporaneous constituents of EPRA indices in this period. A series of customised performance indices were constructed to evaluate firm-level performance attributes.

Findings

Firm-level attributes collectively account for more variation of risk-adjusted return than sector-level attributes over the investigation period. The impact of firm-specific attributes on performance varies significantly from country to country attributable to the contrasting cyclical property market trends in the pre– and post–Global Financial Crisis period. REITs outperformed non-REITs on a risk-adjusted basis attributed to the strong performance of “niche” market entrants allied with stronger regulatory structure. Finally, the findings showcase that sector specialist firms outperform diversified companies inferring that investors should seek to attain diversification through portfolio-based approaches rather than firm-level strategies.

Practical implications

The results have implications for real estate companies aiming to raise capital internally for growth as higher return on equity in general signals reduced cost of capital. Secondly, the findings should be of practical use to multinationals specialising in international real estate trading in designing their business plans in general and formulating cross-country investment strategies in particular. Last but not least, a more refined conceptualisation of corporate-level performance drivers should complement existing professional practices in relation to business/company appraisal.

Originality/value

The research integrates EPRA and Bloomberg data sets to create a series of bespoke index constructs to measure the impact of firm-specific attributes on European listed real estate companies. Additionally, the authors construct a Herfindahl Index (H.I.) to further the debate on the impacts of diversification within the listed real estate sector. This serves to further heighten investor understanding of investment allocation and portfolio optimisation strategies for the listed real estate sector given the increasingly diverse range of investment opportunities within emerging sub-markets.

Details

Journal of Property Investment & Finance, vol. 39 no. 4
Type: Research Article
ISSN: 1463-578X

Keywords

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