Pub Date : 2020-06-24DOI: 10.1108/jpif-05-2020-0059
G. Newell
PurposeThe 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/approachThis 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.FindingsA 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 implicationsWith 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/valueThe 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.
{"title":"The need for more research on the Asian real estate markets","authors":"G. Newell","doi":"10.1108/jpif-05-2020-0059","DOIUrl":"https://doi.org/10.1108/jpif-05-2020-0059","url":null,"abstract":"PurposeThe 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/approachThis 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.FindingsA 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 implicationsWith 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/valueThe 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.","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":" ","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-05-2020-0059","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49061309","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-06-18DOI: 10.1108/jpif-09-2019-0129
Yu Cheng Lin, Chyi Lin Lee, G. Newell
PurposeAs significant listed property investment vehicles, industrial and logistics REITs (I&L REITs) have recently enhanced their property portfolios, often replacing the traditional industrial properties with logistic properties to gain strategic exposure to recent e-commerce trends. This paper aims to assess the investment performance of I&L REITs by assessing the significance, risk-adjusted performance and portfolio diversification benefits of I&L REITs in the Pacific Rim region from July 2011 to December 2018. The strategic property investment implications for I&L REITs are also identified.Design/methodology/approachMonthly total returns from July 2011 to December 2018 were used to analyse the risk-adjusted performance and portfolio diversification benefits for I&L REITs in the United States, Japan, Australia and Singapore. An asset allocation diagram was employed to assess the strategic role of I&L REITs in a mixed-asset portfolio in each case.FindingsI&L REITs generally possessed superior average annual returns compared with the other sub-sector REITs, stocks and bonds in the United States, Japan, Australia and Singapore between July 2011 and December 2018, with desirable portfolio diversification benefits. Importantly, a more significant role for I&L REITs was generally observed in the mixed-asset portfolio compared to the other sub-sector REITs in each of these four markets across the broad portfolio risk spectrum. This reflects I&L REITs delivering enhanced portfolio returns and offering portfolio diversification benefits in a mixed-asset portfolio in the United States, Japan, Australia and Singapore.Practical implicationsProperty investors, particularly property securities funds (PSFs) and income-oriented investors, should consider including I&L REITs in their mixed-asset portfolios, as Pacific Rim–based I&L REITs provided an attractive REIT investment sub-sector, co-existing alongside the other sub-sector REITs and major asset classes in a mixed-asset portfolio in a Pacific Rim context, as well as being a portfolio diversifier. These results confirm the added-value and strategic role of I&L REITs in a mixed-asset portfolio, seeing I&L REITs as an effective investment pathway for I&L property exposure in the Pacific Rim region.Originality/valueThis is the first study to assess the investment performance of I&L REITs in the Pacific Rim region, evaluating their significance, risk-adjusted performance and portfolio diversification benefits, and the role of I&L REITs in a mixed-asset portfolio in the United States, Japan, Australia and Singapore. More importantly, this research is the first paper to provide empirical evidence on I&L REITs, which have often transformed their traditional industrial property portfolios with increased levels of logistics property to gain exposure to recent e-commerce trends. This research enables more informed and practical property investment decision-making regarding I&L REITs and their added-value and strat
{"title":"The added-value role of industrial and logistics REITs in the Pacific Rim region","authors":"Yu Cheng Lin, Chyi Lin Lee, G. Newell","doi":"10.1108/jpif-09-2019-0129","DOIUrl":"https://doi.org/10.1108/jpif-09-2019-0129","url":null,"abstract":"PurposeAs significant listed property investment vehicles, industrial and logistics REITs (I&L REITs) have recently enhanced their property portfolios, often replacing the traditional industrial properties with logistic properties to gain strategic exposure to recent e-commerce trends. This paper aims to assess the investment performance of I&L REITs by assessing the significance, risk-adjusted performance and portfolio diversification benefits of I&L REITs in the Pacific Rim region from July 2011 to December 2018. The strategic property investment implications for I&L REITs are also identified.Design/methodology/approachMonthly total returns from July 2011 to December 2018 were used to analyse the risk-adjusted performance and portfolio diversification benefits for I&L REITs in the United States, Japan, Australia and Singapore. An asset allocation diagram was employed to assess the strategic role of I&L REITs in a mixed-asset portfolio in each case.FindingsI&L REITs generally possessed superior average annual returns compared with the other sub-sector REITs, stocks and bonds in the United States, Japan, Australia and Singapore between July 2011 and December 2018, with desirable portfolio diversification benefits. Importantly, a more significant role for I&L REITs was generally observed in the mixed-asset portfolio compared to the other sub-sector REITs in each of these four markets across the broad portfolio risk spectrum. This reflects I&L REITs delivering enhanced portfolio returns and offering portfolio diversification benefits in a mixed-asset portfolio in the United States, Japan, Australia and Singapore.Practical implicationsProperty investors, particularly property securities funds (PSFs) and income-oriented investors, should consider including I&L REITs in their mixed-asset portfolios, as Pacific Rim–based I&L REITs provided an attractive REIT investment sub-sector, co-existing alongside the other sub-sector REITs and major asset classes in a mixed-asset portfolio in a Pacific Rim context, as well as being a portfolio diversifier. These results confirm the added-value and strategic role of I&L REITs in a mixed-asset portfolio, seeing I&L REITs as an effective investment pathway for I&L property exposure in the Pacific Rim region.Originality/valueThis is the first study to assess the investment performance of I&L REITs in the Pacific Rim region, evaluating their significance, risk-adjusted performance and portfolio diversification benefits, and the role of I&L REITs in a mixed-asset portfolio in the United States, Japan, Australia and Singapore. More importantly, this research is the first paper to provide empirical evidence on I&L REITs, which have often transformed their traditional industrial property portfolios with increased levels of logistics property to gain exposure to recent e-commerce trends. This research enables more informed and practical property investment decision-making regarding I&L REITs and their added-value and strat","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":" ","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-09-2019-0129","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49228497","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-06-06DOI: 10.1108/jpif-05-2020-0053
N. French
PurposeAn understanding of uncertainty has always been an integral part of property valuations. No valuation is certain, and the valuer needs to convey to the user of the valuation in the degree of uncertainty pertaining to the market value.Design/methodology/approachThis practice briefing is a short overview of the importance of understanding uncertainty in valuation in normal markets and the particular difficulties now with the material uncertainty created by the COVID-19 pandemic.FindingsThis paper discusses how important it is for the valuer and the client to communicate and understand the uncertainty in the market at any point of time. The COVID-19 has had a significant impact on property values and the importance of clarity within valuation reports.Practical implicationsThis paper looks at the importance of placing capital and rental value changes due to material uncertainty in valuation reports.Originality/valueThis provides guidance on how professional bodies are advising their members, around the world, on how to report valuations and market value in the context of material uncertainty.
{"title":"Property valuation in the UK: material uncertainty and COVID-19","authors":"N. French","doi":"10.1108/jpif-05-2020-0053","DOIUrl":"https://doi.org/10.1108/jpif-05-2020-0053","url":null,"abstract":"PurposeAn understanding of uncertainty has always been an integral part of property valuations. No valuation is certain, and the valuer needs to convey to the user of the valuation in the degree of uncertainty pertaining to the market value.Design/methodology/approachThis practice briefing is a short overview of the importance of understanding uncertainty in valuation in normal markets and the particular difficulties now with the material uncertainty created by the COVID-19 pandemic.FindingsThis paper discusses how important it is for the valuer and the client to communicate and understand the uncertainty in the market at any point of time. The COVID-19 has had a significant impact on property values and the importance of clarity within valuation reports.Practical implicationsThis paper looks at the importance of placing capital and rental value changes due to material uncertainty in valuation reports.Originality/valueThis provides guidance on how professional bodies are advising their members, around the world, on how to report valuations and market value in the context of material uncertainty.","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":" ","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-05-2020-0053","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46697275","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-06-04DOI: 10.1108/jpif-04-2020-0043
N. French
PurposeThe UK government, in late 2019, announced new proposed targets for the energy efficiency legislation in the UK, MEES – Minimum Energy Efficiency Standards. The current suggestion is that all let properties, commercial or residential, need to be B rated by 2030. If this is implemented, it will have a significant impact upon the UK market property investment market.Design/methodology/approachThis practice briefing is an overview of the 2018 legislation and comments on how market awareness has changed since its introduction and the potential impact upon prices of affected properties moving forwardFindingsThis paper discusses how capital and rental values are beginning to be discounted in the market to allow for current and future liabilities under the MEES legislation. This has a significant impact on strategies for property investment.Practical implicationsThis paper analyses the likelihood of (negative) capital and rental value changes under the proposed stricter energy efficiency guidelines.Originality/valueThis provides guidance on how valuations can be undertaken to reflect any impact of the likely changes to UK energy efficiency legislation.
{"title":"Property valuation in UK: climate change targets and the value of UK investment properties – a change in sea level[1]","authors":"N. French","doi":"10.1108/jpif-04-2020-0043","DOIUrl":"https://doi.org/10.1108/jpif-04-2020-0043","url":null,"abstract":"PurposeThe UK government, in late 2019, announced new proposed targets for the energy efficiency legislation in the UK, MEES – Minimum Energy Efficiency Standards. The current suggestion is that all let properties, commercial or residential, need to be B rated by 2030. If this is implemented, it will have a significant impact upon the UK market property investment market.Design/methodology/approachThis practice briefing is an overview of the 2018 legislation and comments on how market awareness has changed since its introduction and the potential impact upon prices of affected properties moving forwardFindingsThis paper discusses how capital and rental values are beginning to be discounted in the market to allow for current and future liabilities under the MEES legislation. This has a significant impact on strategies for property investment.Practical implicationsThis paper analyses the likelihood of (negative) capital and rental value changes under the proposed stricter energy efficiency guidelines.Originality/valueThis provides guidance on how valuations can be undertaken to reflect any impact of the likely changes to UK energy efficiency legislation.","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":" ","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-04-2020-0043","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45402312","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-22DOI: 10.1108/jpif-01-2020-0004
Larry E. Wofford, D. Wyman, Christopher W. Starr
PurposeThis paper addresses decision-making for commercial real estate (CRE) firms and professionals within the context of rapid technological innovations capable of business model disruption. It considers the paradoxical notion of the need for CRE firms to become ambidextrous by simultaneously exploiting their existing business model and exploring possible opportunities and threats. The paper develops a practical approach, the paradox map, for dealing with this paradoxical problem.Design/methodology/approachThis qualitative research draws on work from organizational management, leadership, social sciences and technology. This research frames the definition and development of an ambidextrous mindset and its components. Paradox management is explored as a possible source of useful tools.FindingsThe ambidextrous mindset is a paradox in that exploit and explore are ongoing interrelated opposing forces. Further, the mindset is the product of a number of sub-paradoxes that act as levers for its development and adjustment. The paradox map is developed to facilitate dealing with numerous paradoxes.Practical implicationsThe paradox map is a useful tool for commercial real-estate firms to understand and develop an ambidextrous mindset.Originality/valueCommercial real estate is experiencing a wave of substantive technological disruption in the proptech marketplace and beyond. This paper attempts to clarify the paradox of innovation and its underlying sub-paradoxes to help professionals navigate the interrelated landscape of exploiting past products and exploring innovations.
{"title":"Innovation and the ambidextrous mindset in commercial real estate: a paradox management approach","authors":"Larry E. Wofford, D. Wyman, Christopher W. Starr","doi":"10.1108/jpif-01-2020-0004","DOIUrl":"https://doi.org/10.1108/jpif-01-2020-0004","url":null,"abstract":"PurposeThis paper addresses decision-making for commercial real estate (CRE) firms and professionals within the context of rapid technological innovations capable of business model disruption. It considers the paradoxical notion of the need for CRE firms to become ambidextrous by simultaneously exploiting their existing business model and exploring possible opportunities and threats. The paper develops a practical approach, the paradox map, for dealing with this paradoxical problem.Design/methodology/approachThis qualitative research draws on work from organizational management, leadership, social sciences and technology. This research frames the definition and development of an ambidextrous mindset and its components. Paradox management is explored as a possible source of useful tools.FindingsThe ambidextrous mindset is a paradox in that exploit and explore are ongoing interrelated opposing forces. Further, the mindset is the product of a number of sub-paradoxes that act as levers for its development and adjustment. The paradox map is developed to facilitate dealing with numerous paradoxes.Practical implicationsThe paradox map is a useful tool for commercial real-estate firms to understand and develop an ambidextrous mindset.Originality/valueCommercial real estate is experiencing a wave of substantive technological disruption in the proptech marketplace and beyond. This paper attempts to clarify the paradox of innovation and its underlying sub-paradoxes to help professionals navigate the interrelated landscape of exploiting past products and exploring innovations.","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":" ","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-01-2020-0004","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42114287","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-19DOI: 10.1108/jpif-09-2019-0131
Andrew Saull, Andrew Baum, Fabian Braesemann
PurposeThis study presents a structured investigation of the most important causes for delay in commercial real estate transactions. It assesses the potential of digital technologies such as “Blockchain”, “Property Passports” or “Automated Valuation Models” to make transactions faster and cheaper.Design/methodology/approachThe authors conduct a focus group interview to identify the individual steps and the parties involved in real estate transactions. Subsequently, the authors discuss the prospects of digital technologies based on semi-structured interviews with real estate professionals and PropTech executives, and a comprehensive screening of technological solutions offered by PropTech firms.FindingsThe lack of an up-to-date, single pool of standardised property information turns out to be the most critical cause for delay in real estate transactions. However, the most promising technologies to mitigate this problem, in particular digital property passports summarising all relevant building information, face substantial barriers to adoption. The real estate industry has so far not been willing to more openly share data, which is a pre-requiste for the successful introduction of property passports. In addition, the principle of caveat emptor makes a lengthy due diligence process essential for buyers.Practical implicationsThe authors conclude that industry-wide collaborations are necessary to help major efficiency gaining technologies to break through. Insurance products should accompany property data log books to guarantee the quality of data provided.Originality/valueThis study considers the potential impact of technologies in the wider context of the complete real estate transaction process. It identifies the major phases of that process and the associated bottlenecks. The authors gather evidence both from industry experts and PropTech executives and contrast their views regarding the potential of digital technologies to remove those bottlenecks.
{"title":"Can digital technologies speed up real estate transactions?","authors":"Andrew Saull, Andrew Baum, Fabian Braesemann","doi":"10.1108/jpif-09-2019-0131","DOIUrl":"https://doi.org/10.1108/jpif-09-2019-0131","url":null,"abstract":"PurposeThis study presents a structured investigation of the most important causes for delay in commercial real estate transactions. It assesses the potential of digital technologies such as “Blockchain”, “Property Passports” or “Automated Valuation Models” to make transactions faster and cheaper.Design/methodology/approachThe authors conduct a focus group interview to identify the individual steps and the parties involved in real estate transactions. Subsequently, the authors discuss the prospects of digital technologies based on semi-structured interviews with real estate professionals and PropTech executives, and a comprehensive screening of technological solutions offered by PropTech firms.FindingsThe lack of an up-to-date, single pool of standardised property information turns out to be the most critical cause for delay in real estate transactions. However, the most promising technologies to mitigate this problem, in particular digital property passports summarising all relevant building information, face substantial barriers to adoption. The real estate industry has so far not been willing to more openly share data, which is a pre-requiste for the successful introduction of property passports. In addition, the principle of caveat emptor makes a lengthy due diligence process essential for buyers.Practical implicationsThe authors conclude that industry-wide collaborations are necessary to help major efficiency gaining technologies to break through. Insurance products should accompany property data log books to guarantee the quality of data provided.Originality/valueThis study considers the potential impact of technologies in the wider context of the complete real estate transaction process. It identifies the major phases of that process and the associated bottlenecks. The authors gather evidence both from industry experts and PropTech executives and contrast their views regarding the potential of digital technologies to remove those bottlenecks.","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":" ","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-09-2019-0131","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42337456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-15DOI: 10.1108/jpif-11-2019-0142
M. Marzuki, G. Newell
PurposeInfrastructure investment is one of the few high-calibre real alternative assets with a strong prominence in the portfolios of institutional investors, especially those with a liability-driven investment strategy. This has seen increased institutional investor interest in infrastructure for reasons such as diversification benefits and inflation hedging abilities, resulting in the substantial growth in non-listed and listed investment products offering access to the infrastructure asset class, and complementing the existing route via direct investment. This paper aims to assess the investment attributes of non-listed infrastructure over Q3:2008–Q2:2019, compared with other global listed assets of infrastructure, property, stocks and bonds.Design/methodology/approachQuarterly total returns were derived from the valuation-based MSCI global non-listed quarterly infrastructure asset index over Q2:2008–Q:2019, which were then filtered to decrease the valuation smoothing effects. A similar set of returns data was also collected for the other global asset classes. The average annual return, annual risk, risk-adjusted performance and portfolio diversification benefits for non-listed infrastructure and other asset investment classes were then computed and compared. Lastly, a constrained optimal asset allocation analysis was performed to validate the performance enhancement role of global non-listed infrastructure in a mixed-asset investment framework.FindingsGlobal non-listed infrastructure delivered the strongest average annual total return performance, outperforming the other asset classes and provided investors with total returns that linked strongly with inflation. Global non-listed infrastructure also provided investors with one of the least volatile investment returns because of its ability to ensure predictable total returns delivery. This means that on the Sharpe ratio risk-adjusted return basis, non-listed infrastructure was also the strongest performing asset. This performance was also delivered with significant portfolio diversification benefits with all assets, resulting in non-listed infrastructure contributing to the mixed-asset portfolios across the entire portfolio risk spectrum.Practical implicationsAside from better risk-return trade-offs, institutional investors are getting more secular with their portfolios for alternative assets that are able to provide other investment benefits such as predictable long-term performance and inflation-linked returns. A further improvement in performance and diversification benefits could be achieved by enriching existing investment portfolios with real alternative assets, one of which is the infrastructure asset class. For institutional investors, having exposure to and being part of the development, delivery and management of infrastructure assets are important, as they are one of the few real assets having considerable significance in the context of society, economy and investment needs.Origina
{"title":"A global investment opportunity in non-listed infrastructure for institutional investors","authors":"M. Marzuki, G. Newell","doi":"10.1108/jpif-11-2019-0142","DOIUrl":"https://doi.org/10.1108/jpif-11-2019-0142","url":null,"abstract":"PurposeInfrastructure investment is one of the few high-calibre real alternative assets with a strong prominence in the portfolios of institutional investors, especially those with a liability-driven investment strategy. This has seen increased institutional investor interest in infrastructure for reasons such as diversification benefits and inflation hedging abilities, resulting in the substantial growth in non-listed and listed investment products offering access to the infrastructure asset class, and complementing the existing route via direct investment. This paper aims to assess the investment attributes of non-listed infrastructure over Q3:2008–Q2:2019, compared with other global listed assets of infrastructure, property, stocks and bonds.Design/methodology/approachQuarterly total returns were derived from the valuation-based MSCI global non-listed quarterly infrastructure asset index over Q2:2008–Q:2019, which were then filtered to decrease the valuation smoothing effects. A similar set of returns data was also collected for the other global asset classes. The average annual return, annual risk, risk-adjusted performance and portfolio diversification benefits for non-listed infrastructure and other asset investment classes were then computed and compared. Lastly, a constrained optimal asset allocation analysis was performed to validate the performance enhancement role of global non-listed infrastructure in a mixed-asset investment framework.FindingsGlobal non-listed infrastructure delivered the strongest average annual total return performance, outperforming the other asset classes and provided investors with total returns that linked strongly with inflation. Global non-listed infrastructure also provided investors with one of the least volatile investment returns because of its ability to ensure predictable total returns delivery. This means that on the Sharpe ratio risk-adjusted return basis, non-listed infrastructure was also the strongest performing asset. This performance was also delivered with significant portfolio diversification benefits with all assets, resulting in non-listed infrastructure contributing to the mixed-asset portfolios across the entire portfolio risk spectrum.Practical implicationsAside from better risk-return trade-offs, institutional investors are getting more secular with their portfolios for alternative assets that are able to provide other investment benefits such as predictable long-term performance and inflation-linked returns. A further improvement in performance and diversification benefits could be achieved by enriching existing investment portfolios with real alternative assets, one of which is the infrastructure asset class. For institutional investors, having exposure to and being part of the development, delivery and management of infrastructure assets are important, as they are one of the few real assets having considerable significance in the context of society, economy and investment needs.Origina","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":" ","pages":""},"PeriodicalIF":1.3,"publicationDate":"2020-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-11-2019-0142","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48607442","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-14DOI: 10.1108/jpif-10-2019-0138
Moshe Szweizer
Purpose - The purpose of this study is to provide a chaos theory-based framework, which can be used to model commercial property market dynamics. Design/methodology/approach - The paper is presented in two parts. In the first, rigorous mathematical reasoning is entertained, so to derive an attractor describing a set of feedback formulae. In the second part, the attractor definition is used to model the Auckland commercial office market. The model is exposed through a set of seven scenarios allowing for analysis of the market behaviour under various exogenously imposed conditions. Findings - The general behaviour of the model is in agreement with the commercial property market conduct observed in Auckland. The model provides information related to the market turning points and allows for an explanation of some intricate market dynamics. These include the anatomy of a market peak and its response to the liquidity oversupply. Practical implications - The model may be used to expand our understanding of the market performance under various exogenically imposed conditions, which allows for planning of market interventions in a more refined manner. Originality/value - The paper is original, in the way the chaos theory is applied to the property markets modelling and allows for expanding the understanding of the market behaviour.
{"title":"Strange attractor in the Auckland commercial property market","authors":"Moshe Szweizer","doi":"10.1108/jpif-10-2019-0138","DOIUrl":"https://doi.org/10.1108/jpif-10-2019-0138","url":null,"abstract":"Purpose - The purpose of this study is to provide a chaos theory-based framework, which can be used to model commercial property market dynamics. Design/methodology/approach - The paper is presented in two parts. In the first, rigorous mathematical reasoning is entertained, so to derive an attractor describing a set of feedback formulae. In the second part, the attractor definition is used to model the Auckland commercial office market. The model is exposed through a set of seven scenarios allowing for analysis of the market behaviour under various exogenously imposed conditions. Findings - The general behaviour of the model is in agreement with the commercial property market conduct observed in Auckland. The model provides information related to the market turning points and allows for an explanation of some intricate market dynamics. These include the anatomy of a market peak and its response to the liquidity oversupply. Practical implications - The model may be used to expand our understanding of the market performance under various exogenically imposed conditions, which allows for planning of market interventions in a more refined manner. Originality/value - The paper is original, in the way the chaos theory is applied to the property markets modelling and allows for expanding the understanding of the market behaviour.","PeriodicalId":46429,"journal":{"name":"Journal of Property Investment & Finance","volume":"38 1","pages":"579-596"},"PeriodicalIF":1.3,"publicationDate":"2020-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1108/jpif-10-2019-0138","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45134336","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-14DOI: 10.1108/jpif-03-2020-0027
Arvydas Jadevicius
Purpose - The study examines Asia Pacific (APAC) non-listed non-core real estate funds' capital calls (investor equity drawdowns) sequence for varying vehicle strategies. Design/methodology/approach - Analysis starts with a cursory data interpretation that extracts a typical investors' equity drawdowns schedule. Thousands of simulations are then computed for each vehicle strategy for each year to further interpretation. Findings - Data and methodological limitations notwithstanding, overall estimates suggest that funds exhibit a contrasting capital calls sequence. As a group, APAC non-core non-listed real estate funds call circa 76.3% of investors' committed capital during the first four years of the fund life. Single sector, single country and value added vehicles have a greater capital calls velocity compared to their multi sector, multi country and opportunity peers. However, the two fund groups exhibit a notable standard deviation heterogeneity of drawdowns. Practical implications - Investors should therefore budget accordingly when choosing either of vehicle strategies to invest in. Originality/value - The study adds additional evidence on the topic of capital calls velocity. Results should assist LPs with their non-listed APAC real estate funds investment programme further.
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