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Article
Publication date: 1 January 1993

Neil Crosby and Robin Goodchild

Examines the valuation of property investments let at rents inexcess of their estimated rental values. Summarises the conventional andcontemporary approaches to market…

Abstract

Examines the valuation of property investments let at rents in excess of their estimated rental values. Summarises the conventional and contemporary approaches to market valuation. Exposes the limitations of the models via an examination of some actual valuations taken from the UK property market. Concludes that future rental growth prospects must be dealt with explicitly in these valuations.

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Journal of Property Valuation and Investment, vol. 11 no. 1
Type: Research Article
ISSN: 0960-2712

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Article
Publication date: 25 April 2008

Robin Goodchild

Abstract

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Journal of Property Investment & Finance, vol. 26 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 May 2006

Abstract

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Journal of Property Investment & Finance, vol. 24 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 25 April 2008

Andrew Baum and Steven Devaney

The purpose of this paper is to consider prospects for UK REITs, which were introduced on 1 January 2007. It specifically focuses on the potential influence of…

Abstract

Purpose

The purpose of this paper is to consider prospects for UK REITs, which were introduced on 1 January 2007. It specifically focuses on the potential influence of depreciation and expenditure on income and distributions.

Design/methodology/approach

First, the ways in which depreciation can affect vehicle earnings and value are discussed. This is then set in the context of the specific rules and features of REITs. An analysis using property income and expenditure data from the Investment Property Databank (IPD) then assesses what gross and net income for a UK REIT might have been like for the period 1984‐2003.

Findings

A UK REIT must distribute at least 90 per cent of net income from its property rental business. Expenditure therefore plays a significant part in determining what funds remain for distribution. Over 1984‐2003, expenditure has absorbed 20 per cent of gross income and been a source of earnings volatility, which would have been exacerbated by gearing.

Practical implications

Expenditure must take place to help UK REITs maintain and renew their real estate portfolios. In view of this, investors should moderate expectations of a high and stable income return, although it may well still be so relative to alternative investments.

Originality/value

Previous literature on depreciation has not quantified amounts spent on portfolios to keep depreciation at those rates. Nor, to our knowledge, has its ideas been placed in the indirect investor context.

Details

Journal of Property Investment & Finance, vol. 26 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 25 April 2008

Ulrich Schacht and Jens Wimschulte

Germany is the biggest real estate market in Europe. Although some established vehicles for indirect property investments are available, the German real estate market is…

Abstract

Purpose

Germany is the biggest real estate market in Europe. Although some established vehicles for indirect property investments are available, the German real estate market is dominated by direct investments and lags behind its international peers in capital market integration. The purpose of this study is to examine whether the recent launch of German REITs may improve this situation.

Design/methodology/approach

Existing indirect property investment vehicles and the new G‐REIT are analysed and compared along the dimensions of transparency, liquidity and risk/return characteristics. In addition, potential capital flows into G‐REITs are investigated and economic implications derived.

Findings

The study identifies the limitations of existing German indirect real estate investment vehicles and demonstrates the superior characteristics of the new G‐REIT. Substantial short‐term capital flows from existing vehicles to G‐REITs are, however, unlikely. Instead the temporary exit tax will foster an economically beneficial reallocation of capital by private companies and public authorities through property sales to new domestic and international investors via G‐REITs.

Originality/value

The results indicate that G‐REITs have the potential to attract substantial funds in the medium term and facilitate a more integrated and developed German property and capital market.

Details

Journal of Property Investment & Finance, vol. 26 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 25 April 2008

Chiang Yat‐Hung, So Chun‐Kei Joinkey and Tang Bo‐Sin

The aim of the paper is to determine the dynamic relationships between REIT returns and those of other financial and real unsecuritized assets internationally.

Abstract

Purpose

The aim of the paper is to determine the dynamic relationships between REIT returns and those of other financial and real unsecuritized assets internationally.

Design/methodology/approach

Using a multi‐factor model the flexible least squares (FLS) coefficients of REIT returns against stock, bond and direct property returns are derived for the REIT markets of the USA, Australia, Japan and Singapore.

Findings

The correlation between REIT returns and those of other financial and real assets varies not only across countries but also inter‐temporally. REITs can certainly provide diversification benefits to a multi‐asset investment portfolio. However, due to the time‐varying nature of the correlation, active management is advised and REITs should be not be viewed as a complete substitute for direct property investment.

Research limitations/implications

There are two major limitations to the study. Firstly, the sampling periods used are not the same across the countries due to differing market maturity. Secondly, there are also sheer differences in market sizes. However, as REIT markets around the world continue to grow and become more mature in terms of their breath and depth, there will be a richer set of data available for more in‐depth analyses based on the methodology presented here.

Practical implications

The conclusions on both mature and emerging REIT markets could provide some ideas for international investors as to how they should formulate their time‐varying investment strategies and reconstruct their portfolios as mature markets become more efficient and emerging ones more mature.

Originality/value

The inclusion of Asian markets enables investigation of the correlation between REITs and different assets in respect not only of different market conditions, but also different geographical locations and market maturity. The international dimension of this paper may appeal to readers and investors who are interested in identifying diversification opportunities around the globe, especially so when the capital and property markets around the world are becoming more integrated and globalized.

Details

Journal of Property Investment & Finance, vol. 26 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 25 April 2008

Michael C.H. Quek and Seow Eng Ong

There is currently no real estate investment trust (REIT) listed in China. As of date, only two REITs – GZI REIT of Hong Kong and CapitaRetail China Trust (CRCT) of…

Abstract

Purpose

There is currently no real estate investment trust (REIT) listed in China. As of date, only two REITs – GZI REIT of Hong Kong and CapitaRetail China Trust (CRCT) of Singapore – have securitised Chinese property assets. The purpose of this paper is to examine the driving forces and the obstacles surrounding China REITs, and evaluate REIT securitisation as an exit strategy for Chinese properties.

Design/methodology/approach

The paper analyses the performance of the two cross‐border REITs and investigates whether REITs holding Chinese assets outperform other listed REITs.

Research limitations/implications

CRCT outperforms GZI REIT as well as some of the other Singapore REITs, while GZI REIT ranked second lowest in terms of price performance when compared to other Hong Kong REITs. The limited history of CRCT suggests that when a well‐structured REIT holding Chinese assets can perform very well. We also infer that performance is closely linked to portfolio composition and diversification, growth story and originator reputation.

Originality/value

The study shows that there is indeed a strong local demand for China REITs, and that REITs can provide an alternative source of real estate financing for Chinese developers and promote a better regulated Chinese real estate market.

Details

Journal of Property Investment & Finance, vol. 26 no. 3
Type: Research Article
ISSN: 1463-578X

Keywords

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Article
Publication date: 17 July 2007

Nick French

Abstract

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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: 26 October 2010

Giacomo Morri

Abstract

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Journal of European Real Estate Research, vol. 3 no. 3
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 1 April 2006

Abstract

Details

Measuring Business Excellence, vol. 10 no. 2
Type: Research Article
ISSN: 1368-3047

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