Briefings in Real Estate Finance最新文献

The paper focuses on the benefits to a borrower from differentiating between the commercial perceptions of different specialist property lenders. This is expanded into an overview of how CLP has systemised this ‘arbitrage’ potential into a product called ‘Hand in Glove’. The paper rounds off with a demonstration of how this much-neglected facet of the market can harbour competitive advantages for the companies utilising it. Copyright © 2001 Henry Stewart Publications

This study examined both the short-run and long-run shareholder wealth effects of private placements of debt made by Real Estate Investment Trusts (REITs). The authors found that there is no significant market reaction to the placement. One-year and three-year adjusted abnormal returns were found to be negative and significant for placing REITs. This suggests that REITs do not benefit from added monitoring associated with the private placement. The results also suggest that REIT managers issue in order to grow the asset size of the firm to the detriment of shareholder wealth. Copyright © 2004 Henry Stewart Publications

UK retailing is currently being reshaped by new competitive patterns and pressures, contributing to a weakening in retail property performance. The growth of online retailing has been perceived as a further threat to the sector, although the problems facing ‘pure play’ e-tailers mean that Internet shopping is likely to be increasingly dominated by multi-channel retailers. Web-based retailing will add to competitive pressures on retailers and increase general price transparency. Internet sales penetration will vary between products and services and also geographically. Even with Internet sales growth being concentrated on established retailers, there will be impacts on retail floor space productivity, property requirements and store networks, with implications for retail property performance. Online shopping could reinforce the existing trend of polarisation of retail spending into the larger and more attractive centres within the retail hierarchy. Retailers and retail property investors need to find ways of upgrading the shopping experience to respond to the growth of online sales. Copyright © 2001 Henry Stewart Publications

Lender-paid mortgage insurance (MI) can provide substantial credit enhancement in mortgage-backed and mortgage-related asset-backed transactions. In some cases, lender-paid MI has contributed more than 75 per cent of the total credit enhancement for the most senior classes.

Lender-paid MI offers insurance coverage at the individual loan level. In most respects, lender-paid MI policies are generally similar to traditional borrower-paid policies. Lender-paid MI has no impact on the frequency of borrower default, but it serves to reduce the severity of loss when borrowers default.

Because lender-paid policies offer coverage on individual loans, the benefit from the policies is limited to the amounts paid by the insurer on each individual defaulted loan, ie the insurance does not ‘cross-collateralise’ the loans. Therefore, if the loss on a defaulted loan is less than the maximum coverage of the insurance policy, the additional coverage cannot be applied to losses on other defaulted loans whose claims exceed their insurance coverage. The wider the range in loss severity on defaulted loans, the less the benefit that lender-paid MI offers. The amount of credit enhancement that lender-paid MI brings to a transaction is directly related to the level of coverage, the number and quality of loans covered, and to any exclusions from coverage. The benefit is also dependent on a loan originator's business practices, particularly with respect to appraisals. Overstated appraisals may cause the MI coverage to be insufficient to cover actual losses. In addition, a servicer's ability to foreclose on defaulted loans and to process claims in a timely fashion is important, because failure to perform these actions may result in a claim adjustment or denial. Because lender-paid MI cannot be cancelled in securitised transactions, it is marginally more durable than borrower-paid MI. Finally, the benefit from lender-paid MI also depends on the rating of the insurance provider. Generally, the insurance provider should have a rating of Aa3 or higher for the Aaa classes in a transaction to get the full credit that the insurance can provide. Because the benefit is dependent on the insurer's rating, transactions that rely on mortgage insurance for a significant percentage of their total credit enhancement are susceptible to downgrade risk if the insurer's rating drops. Copyright © 2002 Henry Stewart Publications

This paper concentrates primarily on UK central government policy, which relates mainly to England and Wales. Brief summaries of activities in the devolved nations are also included. The government undertook a review of housing policy during 2000, as well as implementing other important policy initiatives, such as the Commonhold and Leasehold Reform Bill and the pilot Tenancy Deposit Schemes. The review was regarded as a profound disappointment by the private rented residential sector, and leaves the impression of a government that does not understand the sector, and does not have the time or the resources to acquire that understanding or think deeply about it. Consequently, it falls back on gut instincts, political preconceptions and token gestures. There are many important questions for the sector with which the government seems not to have engaged. Copyright © 2001 Henry Stewart Publications

This paper reports on the total returns achieved on European property investments in recent years, drawing on the IPD Indices of performance for six countries. The results demonstrate the dominance of ‘national’ factors in determining widely varying property returns, and lack of any evidence of convergence in rates of return or in the composition of investor portfolios. The issues involved in creating a property index with full European coverage, and progress towards that objective, are discussed. Copyright © 2001 Henry Stewart Publications

The UK economy is likely to put in a solid performance during the next two years. Economic activity is expected to grow at a below-trend rate of around 1.7 per cent this year, with the impact of sharp equity market falls, a weak global economy and manufacturing sector fragility largely offset by a lower interest rate profile. Conditions remain in place for recovery to around-trend growth in 2003–04, as the world economy picks up speed. That said, the probability on the central forecast has been reduced, reflecting increased downside risks. If the downside were to materialise, margin pressures would tend to intensify in thin trading markets. Business propositions should therefore be examined for vulnerability to potentially weak pricing leverage, as well as to the risk of more subdued demand growth for an extended period. Copyright © 2002 Henry Stewart Publications

The question the author has been asked to address is ‘Will the growth of new investment vehicles and the restructuring of old ones require more and offer more to property bankers?’ The answer to this question is very straightforward: ‘Yes and maybe!’ Yes, of course it is going to require more thought and maybe it will offer more in terms of opportunities to add value and generate fees. Investment bankers love change and volatility. Altering capital structures is a key part of the day-to-day business. If these bankers do not create the trend, they are left behind it. Copyright © 2002 Henry Stewart Publications

Studies have examined the number of properties required to reduce the risk in a real estate portfolio. This research has concentrated on examining the impact of portfolio size on the reduction in the standard deviation of returns from ex post time-series data. However, the ex post time-series standard deviation is not really relevant to long-term institutional investors, such as insurance companies and pension funds, who are more concerned with the variability of the terminal wealth of their portfolios, from which policy holders and pensioners will derive their benefits. Long-term investors with specific holding period requirements are less concerned with the within-period volatility of their portfolios than with the possibility that their portfolio returns will fail to finance their liabilities. The terminal-wealth standard deviation (TWSD) rather than the time-series standard deviation (TSSD) has been proposed as the ‘true’ measure of portfolio variability to such investors. This paper compares the potential benefits and limitations of risk reduction, as measured by TWSD and TSSD, in the UK property market using a large sample of actual property returns over the period 1981 to 1996. Copyright © 2002 Henry Stewart Publications