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The aim of this Real Estate Insight is to comment upon commercial real estate research. Much of the current research on commercial real estate sits in academic silos, constrained by disciplinary boundaries and rejecting insights from other areas. This can lead to an impoverished understanding of the processes and practices that drive market behaviour.

This Real Estate Insight, through the lens of history, draws on insights from a century earlier and, in particular, from the work of Frank Ramsey; the paper argues that market behaviour is shaped by the role of key actors and persistent beliefs which need to be accounted for in our models of market practice.

The paper argues that current research paradigms need to accommodate agency explicitly into existing models and that real estate research will benefit immensely if researcher were more open in seeking ideas from outside the real estate field and to be more open to external ideas and concepts.

The paper suggests that property research needs to be more embracing of other academic disciplines to develop a full understanding of the numerous and various drivers within commercial real estate markets.

This is a review of how beliefs impact upon commercial real estate markets. As with many things, history can help researchers today get a broader and more appropriate perspective on market drivers and how they affect decision-making.

This paper investigates the relationship between the sustainable finance disclosure regulation (SFDR) and the performance of unlisted real estate funds.

While existing literature has primarily focused on the impact of voluntary sustainability disclosure, such as certifications or reporting standards, this study addresses a significant research gap by constructing and analyzing the financial J-Curve of 40 funds under the SFDR. The authors employ a panel regression analysis to examine the effects of different SFDR categories on fund performance.

The findings reveal that funds categorized under Article 8 of the SFDR do not exhibit significantly poorer performance compared to funds categorized under Article 6 during the initial phase after launch. On average, Article 8 funds even demonstrate positive returns earlier than their peers. However, the panel regression analysis suggests that Article 8 funds slightly underperform when compared to Article 6 funds over time.

While investors may not anticipate lower initial returns when opting for higher SFDR categories, they should nevertheless be aware of the limitations inherent in the existing SFDR labeling system within the unlisted real estate sector.

To the best of our knowledge, this study represents the first quantitative examination of unlisted real estate fund performance under the SFDR. By providing unique insights into the J-Curves of funds, our research contributes to the existing body of knowledge on the impact of sustainability regulations in the financial sector.

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.

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.

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.

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.

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.

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.

COVID-19 has had a significant global impact at many levels, including an impact on global real estate capital flows. This paper examines the impact of COVID-19 on global real estate capital flows over 2019–2022 to clearly articulate the extent of this impact on global real estate capital flows across regions, countries, major cities, real estate sub-sectors and by major real estate investors. Drivers of these global real estate capital flow changes are also identified. The strategic real estate investment implications of this impact are highlighted, as well as the implications going forward concerning the global real estate strategies for the real estate portfolios held by institutional investors.

To assess the impact of COVID-19, the Real Capital Analytics (RCA) database of global real estate transactions over 2019–2022 is used to drill-out critical details on commercial real estate transactions to explore specific trends in global real estate capital flows in this period of the COVID-19 crisis. This includes real estate capital flows to specific regions, countries, cities, real estate sub-sectors as well as the role of major real estate investors.

The impact of COVID-19 is clearly shown with the major decline in global real estate capital flows in 2020, with a strong recovery in 2021. Reduced levels of real estate capital flows in 2022 reflect different risk dynamics, where 2022 has seen investors move on from the COVID-19 environment. In 2022, the risk of COVID-19 for real estate has been replaced by global real estate risk factors such as inflation concerns, geopolitical tensions, economic growth concerns, increased cost of debt issues and supply chain issues. This sees COVID-19 now rated as only the 6th most important risk factor in real estate investment decision-making for real estate investors in the Americas, Europe, Middle East and Africa (EMEA) and Asia–Pacific.

This research has clearly shown the extent of the impact of COVID-19 on global real estate capital flows, as well as identifying the drivers of these real estate capital flow changes. It highlights that real estate investors have moved on and are now prioritising new risk factors ahead of COVID-19 risk. These critical risk factors reflect more recent financial, economic and geopolitical issues, which are key issues in real estate investment decision-making going forward. Investors need to structure these new risk factors into their real estate investment decision-making for the ongoing management of their domestic and international real estate portfolios.

This paper is the first published empirical research analysis of global real estate capital flows during the COVID-19 crisis. This research provides major insights on real estate investment decision-making during this crisis and the strategic changes seen in acquiring real estate portfolios in response to this major global crisis. The change in real estate risk priorities in 2022 as real estate investors move on from the COVID-19 environment is also identified and is clearly reflected in the 2022 global real estate capital flows.

ESG (Environment, Social, Governance) has taken on increased importance in recent years for all stakeholders, with the S dimension now taking on a stronger focus in the real estate space. This paper proposes a new metric to be used in the S space to assess improvements in aspects such as gender equality and cultural diversity in real estate. It adds to the S metrics currently available to see the more effective delivery of the S dimension into real estate investment decision-making.

A new S metric in ESG is proposed and validated. Using this metric, examples regarding gender equality and cultural diversity are assessed among leading real estate players in Australia. This S metric is assessed over a number of time periods to demonstrate the improvements in gender equality and cultural diversity in these major real estate players.

This new S metric is seen to be highly effective and robust in capturing the changes in various aspects of the S dimension in ESG in the real estate space today; particularly concerning gender equality and cultural diversity. It is clearly able to demonstrate the significant changes in increased participation of women at the more senior leadership levels by leading players in the real estate space.

With ESG becoming a critical issue in the real estate sector, issues involved in the S space will take on increased significance going forward. This is critical, as the elements of the S dimension such as gender equality and cultural diversity are important aspects for an effectively functioning real estate industry. The S metric developed in this paper can be used for benchmarking purposes over time, as well as between real estate players, between sub-sections within a real estate organisation, and comparing against other industry sectors. It is also relevant in all organisations, and is not just limited to the real estate sector. Additional metrics in the S space are an important development to further empirically assess the effective delivery of the S dimension of ESG in the real estate sector and more broadly.

This paper specifically proposes this new S metric in ESG in the real estate industry. This is a key issue for the real estate industry going forward at all levels, as it will facilitate a more diverse real estate industry and more effective real estate investment decision-making. This S metric is applicable in all organisational sectors where the S dimension of ESG is important.

Opportunity real estate funds are an important style of real estate investing for institutional investors seeking nonlisted real estate exposure. Importantly, institutional investors have sought exposure to the China real estate market, often via opportunity real estate funds. This has been by a pure China opportunity real estate fund (100% China opportunity real estate) or by a pan-Asia opportunity real estate fund where China opportunity real estate was part of this pan-Asia opportunity real estate portfolio. Using two bespoke China opportunity real estate indices developed by the authors, this paper aims to assess the risk-adjusted performance and portfolio diversification benefits of China opportunity real estate in a mixed-asset portfolio over 2008–2020. It also highlights critical issues for institutional investors going forward to factor into their real estate investment decision-making for effective China real estate exposure.

This paper develops two bespoke China opportunity real estate fund performance indices to assess the risk-adjusted performance and portfolio diversification benefits of China opportunity real estate funds in a mixed-asset portfolio over 2008–2020. An asset allocation diagram is used to assess the role of China opportunity real estate in a mixed-asset portfolio via both the non-listed and listed real estate investment channels.

Over 2008–2020, China opportunity real estate exposure via pan-Asia opportunity real estate funds were seen to outperform pure China opportunity real estate funds. In both formats, China opportunity real estate funds were seen to have a significant role in a China mixed-asset portfolio across most of the portfolio risk spectrum; particularly compared to listed real estate exposure in China. On-going issues regarding real estate risk management in China will take on increased importance for institutional investors seeking China real estate exposure.

Opportunity real estate funds are an important style of real estate investing, often used by institutional investors to gain non-listed real estate exposure in a developing real estate market. This style of real estate investing has been popular with institutional investors seeking exposure to China real estate as part of the China economic growth dynamic. The results of this research highlight the importance of opportunity real estate investing in China, both via a pure China opportunity real estate fund and via a pan-Asia opportunity real estate fund. Based on this empirical analysis, China opportunity real estate exposure is seen to be more effective via a pan-Asia opportunity real estate fund than a 100% China opportunity real estate fund. A range of practical China real estate investment issues are also highlighted for the effective delivery of China real estate exposure for institutional investors going forward; this particularly relates to the on-going risk management for real estate investment in China.

This paper is the first empirical research analysis of the risk-adjusted performance of China opportunity real estate and its role in a mixed-asset portfolio. Using bespoke China opportunity real estate fund indices developed by the authors, this research enables empirically-validated, more informed and practical opportunity real estate investment decision-making regarding the strategic role of China opportunity real estate in an institutional investor's portfolio. It also highlights the importance of various facets of real estate risk management in China going forward.

Midway through construction, a hotel developer realised that costs had risen too much to be feasible for equity capital. They repositioned the asset as a ResiTel wherein each suite would be sold as a condominium unit to retail buyers. This called for setting up two separate entities: one (PropCo) for asset management and the other (LeaseCo) for operating the hotel. Unit owners would earn a regular share of hotel income. The lenders protected additional sale-risk by more conservative loan terms. The developer must analyse the feasibility of the repositioned asset.

Healthcare property has become an important alternate property sector in recent years for many international institutional investors. The purpose of this paper is to assess the risk-adjusted performance, portfolio diversification benefits and performance dynamics of French healthcare property in a French property portfolio and mixed-asset portfolio over 1999–2020. French healthcare property is seen to have different performance dynamics to the traditional French property sectors of office, retail and industrial property. Drivers and risk factors for the ongoing development of the direct healthcare property sector in France are also identified, as well as the strategic property investment implications for institutional investors.

Using annual total returns, the risk-adjusted performance, portfolio diversification benefits and performance dynamics of French direct healthcare property over 1999–2020 are assessed. Asset allocation diagrams are used to assess the role of direct healthcare property in a French property portfolio and in a French mixed-asset portfolio. The role of specific drivers for French healthcare property performance is also assessed. Robustness checks are also done to assess the potential impact of COVID-19 on the performance of French healthcare property.

French healthcare property is shown to have different performance dynamics to the traditional French property sectors of office, retail and industrial property. French direct healthcare property delivered strong risk-adjusted returns compared to French stocks, listed healthcare and listed property over 1999–2020, only exceeded by direct property. Portfolio diversification benefits in the fuller mixed-asset portfolio context were also evident, but to a much lesser extent in a narrower property portfolio context. Importantly, this sees French direct healthcare property as strongly contributing to the French property and mixed-asset portfolios across the entire portfolio risk spectrum and validating the property industry perspective of healthcare property being low risk and providing diversification benefits in a mixed-asset portfolio. However, this was to some degree to the loss or substitution of traditional direct property exposure via this replacement effect. French direct healthcare property and listed healthcare are clearly shown to be different channels in delivering different aspects of French healthcare performance to investors. Drivers of French healthcare property performance are also shown to be both economic and healthcare-specific factors. The performance of French healthcare property is also shown to be different to that seen for healthcare property in the UK and Australia. During COVID-19, French healthcare property was able to show more resilience than French office and retail property.

Healthcare property is an alternate property sector that has become increasingly important in recent years. The results highlight the important role of direct healthcare property in a French property portfolio and in a French mixed-asset portfolio, with French healthcare property having different investment dynamics to the other traditional French property sectors. The strong risk-adjusted performance of French direct healthcare property compared to French stocks, listed healthcare and listed property sees French direct healthcare property contributing to the mixed-asset portfolio across the entire portfolio risk spectrum. French healthcare property’s resilience during COVID-19 was also an attractive investment feature. This is particularly important, as many institutional investors now see healthcare property as an important property sector in their overall portfolio; particularly with the ageing population dynamics in most countries and the need for effective social infrastructure. The importance of French direct healthcare property sees direct healthcare property exposure accessible to investors as an important alternate real estate sector for their portfolios going forward via both non-listed healthcare property funds and the further future establishment of more healthcare REITs to accommodate both large and small institutional investors respectively. The resilience of French healthcare property during COVID-19 is also an attractive feature for future-proofing an investor’s portfolio.

This paper is the first published empirical research analysis of the risk-adjusted performance, diversification benefits and performance dynamics of French direct healthcare property, and the role of direct healthcare property in a French property portfolio and in a French mixed-asset portfolio. This research enables empirically validated, more informed and practical property investment decision-making regarding the strategic role of French direct healthcare property in a portfolio; particularly where the strategic role of direct healthcare property in France is seen to be different to that in the UK and Australia via portfolio replacement effects. Clear evidence is also seen of the drivers of French healthcare property performance being strongly influenced by healthcare-specific factors, as well as economic factors.

This paper investigates the dynamic nature of risk in pre-, during- and post-COVID duration. It investigates how commercial office portfolio stakeholders in India perceived risk during the COVID pandemic, their risk response and mitigation strategies, and emerging structural changes that would impact the commercial office portfolio (COP) in the post-COVID period.

A qualitative and applied research method is adopted for the study. Through purposive sampling, commercial office portfolio stakeholders were selected and interviewed using a semi-structured questionnaire having two parts. In the first part, risk attributes were accessed on the Likert scale and in the second part there were open-ended questions.

The uncertainty during the COVID period increased the risk perception significantly. There was a sense of urgency to retain the tenants, preserve the headline rentals and keep the properties operational. COP managers were forthcoming to offer rent deferments, common area maintenance discounts and upgrades in the physical office in form of touchless equipment, better air filters, etc. Post-pandemic there would be extensive use of technology and data for facility management and space utilization analytics; mainstreaming of hybrid working and flexible office spaces; increased certification of buildings; adoption of ESG and sustainability norms; and better-designed buildings with a focus on EHS and wellbeing.

Identifying structural changes in the post-pandemic period will help the COP managers to align their portfolios to the emerging office market requirements.

This study helps in developing an understanding of the dynamic nature of the risk across pre-, during- and post-COVID periods. And risk responses and mitigation strategies adopted during the COVID period in an emerging market.