Pub Date : 2024-07-10DOI: 10.1108/jpif-03-2024-0043
Stephen E. Roulac
PurposeThe intent of this practice briefing is to provide clarity on the role of market cycles in influencing property valuations at specific points in time. Market cycles are important to the valuation function as real estate cycles have been a critical underlying reason for the financial successes and failures of real estate investments throughout history.Design/methodology/approachThis practice briefing is an overview of the role of the valuer/appraiser in decanting out market information and expectations from market comparables.FindingsThis briefing is a review of property valuation and proffers that connecting market cycles to valuation will capture a more expansive and inclusive world view that explicitly incorporates consideration of multiple factors that are reflected in market value.Research limitations/implicationsImportant implication of this research is that valuers be aware of how profoundly market cycles concepts and circumstances influence property values – and implement that knowledge in property valuation assignments.Practical implicationsThis briefing considers the implications of using market cycles knowledge as a core resource for the property valuer. All involved in the property discipline must recognise that market cycles dramatically influence property values at any one point in time.Social implicationsSocieties, cultures, governments, business and places depend upon and have major stake in competent, responsible, informed decisions about properties and property interest. This research contributes to superior property practice – and therefore supports the interests of societies, cultures, governments, business and places.Originality/valueThis briefing provides guidance on how to interpret markets, market cycles and market information that feed into property pricing and market value.
{"title":"Practice Briefing: Property valuation and market cycles","authors":"Stephen E. Roulac","doi":"10.1108/jpif-03-2024-0043","DOIUrl":"https://doi.org/10.1108/jpif-03-2024-0043","url":null,"abstract":"PurposeThe intent of this practice briefing is to provide clarity on the role of market cycles in influencing property valuations at specific points in time. Market cycles are important to the valuation function as real estate cycles have been a critical underlying reason for the financial successes and failures of real estate investments throughout history.Design/methodology/approachThis practice briefing is an overview of the role of the valuer/appraiser in decanting out market information and expectations from market comparables.FindingsThis briefing is a review of property valuation and proffers that connecting market cycles to valuation will capture a more expansive and inclusive world view that explicitly incorporates consideration of multiple factors that are reflected in market value.Research limitations/implicationsImportant implication of this research is that valuers be aware of how profoundly market cycles concepts and circumstances influence property values – and implement that knowledge in property valuation assignments.Practical implicationsThis briefing considers the implications of using market cycles knowledge as a core resource for the property valuer. All involved in the property discipline must recognise that market cycles dramatically influence property values at any one point in time.Social implicationsSocieties, cultures, governments, business and places depend upon and have major stake in competent, responsible, informed decisions about properties and property interest. This research contributes to superior property practice – and therefore supports the interests of societies, cultures, governments, business and places.Originality/valueThis briefing provides guidance on how to interpret markets, market cycles and market information that feed into property pricing and market value.","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"24 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141662329","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 : 2024-05-14DOI: 10.1108/jpif-01-2024-0008
Ben Hoehn, Hannah Salzberger, Sven Bienert
PurposeThe study aims to assess the effectiveness of prevailing methods for quantifying physical climate risks. Its goal is to evaluate their utility in guiding financial decision-making within the real estate industry. Whilst climate risk has become a pivotal consideration in transaction and regulatory compliance, the existing tools for risk quantification frequently encounter criticism for their perceived lack of transparency and comparability.Design/methodology/approachWe utilise a sequential exploratory mixed-methods analysis to integrate qualitative aspects of underlying tool characteristics with quantitative result divergence. In our qualitative analysis, we conduct interviews with companies providing risk quantification tools. We task these providers with quantifying the physical risk of a fictive pan-European real estate portfolio. Our approach involves an in-depth comparative analysis, hypothesis tests and regression to discern patterns in the variability of the results.FindingsWe observe significant variations in the quantification of physical risk for the pan-European portfolio, indicating limited utility for decision-making. The results highlight that variability is influenced by both the location of assets and the hazard. Identified reasons for discrepancies include differences in regional databases and models, variations in downscaling and corresponding scope, disparities in the definition of scores and systematic uncertainties.Practical implicationsThe study assists market participants in comprehending both the quantification process and the implications associated with using tools for financial decision-making.Originality/valueTo our knowledge, this study presents the initial robust empirical evidence of variability in quantification outputs for physical risk within the real estate industry, coupled with an exploration of their underlying reasons.
{"title":"Assessing climate risk quantification tools – mere fulfilment of duty or actually beneficial?","authors":"Ben Hoehn, Hannah Salzberger, Sven Bienert","doi":"10.1108/jpif-01-2024-0008","DOIUrl":"https://doi.org/10.1108/jpif-01-2024-0008","url":null,"abstract":"PurposeThe study aims to assess the effectiveness of prevailing methods for quantifying physical climate risks. Its goal is to evaluate their utility in guiding financial decision-making within the real estate industry. Whilst climate risk has become a pivotal consideration in transaction and regulatory compliance, the existing tools for risk quantification frequently encounter criticism for their perceived lack of transparency and comparability.Design/methodology/approachWe utilise a sequential exploratory mixed-methods analysis to integrate qualitative aspects of underlying tool characteristics with quantitative result divergence. In our qualitative analysis, we conduct interviews with companies providing risk quantification tools. We task these providers with quantifying the physical risk of a fictive pan-European real estate portfolio. Our approach involves an in-depth comparative analysis, hypothesis tests and regression to discern patterns in the variability of the results.FindingsWe observe significant variations in the quantification of physical risk for the pan-European portfolio, indicating limited utility for decision-making. The results highlight that variability is influenced by both the location of assets and the hazard. Identified reasons for discrepancies include differences in regional databases and models, variations in downscaling and corresponding scope, disparities in the definition of scores and systematic uncertainties.Practical implicationsThe study assists market participants in comprehending both the quantification process and the implications associated with using tools for financial decision-making.Originality/valueTo our knowledge, this study presents the initial robust empirical evidence of variability in quantification outputs for physical risk within the real estate industry, coupled with an exploration of their underlying reasons.","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"20 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140981875","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 : 2024-05-14DOI: 10.1108/jpif-01-2024-0003
G.R. Swathi, V.R. Uma
PurposeThe present study delves into the causes of relatively lower retail participation in the Indian REIT market. Specifically, it investigates investors' attitudes and perceptions towards REITs as a unique asset class. This paper provides a comprehensive understanding of the perception and factors influencing Indian retail investors' reluctance to participate in the REIT market.Design/methodology/approachQualitative research was conducted through semi-structured interviews to gather insights from non-investors in REITs. The data were transcribed and analyzed using content analysis techniques. Finally, coding techniques were used to identify broad study themes.FindingsAccording to the study results, many retail investors are unfamiliar with REITs. Even among those knowledgeable about REITs and with a favorable view, it is not commonly seen as a feasible investment option due to its early stage, unattractive returns and limited number of REITs.Practical implicationsDeveloped countries have established REIT markets, while it is still in its infancy in developing countries such as India. Financial advisors, fund houses and the media should focus on educating investors to increase awareness.Originality/valueThe study is the first qualitative investigation into the perception of retail investors to understand the reasons for lower retail engagement in the Indian REIT market.
{"title":"Unveiling the Indian REIT narrative-qualitative insights into retail investors’ perspectives","authors":"G.R. Swathi, V.R. Uma","doi":"10.1108/jpif-01-2024-0003","DOIUrl":"https://doi.org/10.1108/jpif-01-2024-0003","url":null,"abstract":"PurposeThe present study delves into the causes of relatively lower retail participation in the Indian REIT market. Specifically, it investigates investors' attitudes and perceptions towards REITs as a unique asset class. This paper provides a comprehensive understanding of the perception and factors influencing Indian retail investors' reluctance to participate in the REIT market.Design/methodology/approachQualitative research was conducted through semi-structured interviews to gather insights from non-investors in REITs. The data were transcribed and analyzed using content analysis techniques. Finally, coding techniques were used to identify broad study themes.FindingsAccording to the study results, many retail investors are unfamiliar with REITs. Even among those knowledgeable about REITs and with a favorable view, it is not commonly seen as a feasible investment option due to its early stage, unattractive returns and limited number of REITs.Practical implicationsDeveloped countries have established REIT markets, while it is still in its infancy in developing countries such as India. Financial advisors, fund houses and the media should focus on educating investors to increase awareness.Originality/valueThe study is the first qualitative investigation into the perception of retail investors to understand the reasons for lower retail engagement in the Indian REIT market.","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"10 5","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140979628","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 : 2024-05-13DOI: 10.1108/jpif-01-2024-0011
Hassan Shuaibu Liman, Abdul-Rasheed Amidu, Deborah Levy
PurposeThe complexity of property valuation, coupled with valuers’ cognitive limitations, makes some degree of error inevitable in valuations. However, given the crucial role that valuations play in the efficient functioning of the economy, there is a need for continuous improvement in the reliability of reported values by enhancing the quality of the decision-making process. The purpose of this paper is to review previous research on valuation decision-making, with particular interest in examining the approaches to improving the quality of valuation decisions and identifying potential areas for further research.Design/methodology/approachThe paper adopts a narrative approach to review 42 research articles that were obtained from Scopus and Web of Science databases and through author citation searches.FindingsOur findings show that existing literature is skewed towards examining the use of technology in the form of decision support systems (DSS), with limited research attention on non-technological (i.e. behavioural) approaches to improving the quality of valuation decisions. We summarise the non-technological approaches and note that much of the discussions on these approaches often appear as recommendations arising from other studies rather than original investigations in their own rights.Practical implicationsWe conclude that studies investigating the effectiveness of the non-technological approaches to improving valuation decision-making are lacking, providing various avenues for further research.Originality/valueThis paper presents the first attempt to provide a comprehensive overview of non-technological approaches to improving the quality of valuation decisions.
目的 物業估值的複雜性，加上估值師在認知上的限制，令估值難免會出現一定程度的誤差。然而，鉴于估值对经济的有效运行起着至关重要的作用，因此有必要通过提高决策过程的质量来不断提高报告价值的可靠性。本文旨在回顾以往有关估值决策的研究，尤其关注研究提高估值决策质量的方法，并确定进一步研究的潜在领域。 本文采用叙述法回顾了从 Scopus 和 Web of Science 数据库以及通过作者引文搜索获得的 42 篇研究文章。研究结果我们的研究结果表明，现有文献偏重于研究以决策支持系统 (DSS) 为形式的技术的使用，而对提高估值决策质量的非技术（即行为）方法的研究关注有限。我们对非技术方法进行了总结，并指出有关这些方法的大部分讨论往往是其他研究提出的建议，而非其本身的原创性调查。我们的结论是，缺乏对改善估值决策的非技术方法的有效性进行调查的研究，这为进一步研究提供了各种途径。
{"title":"Approaches to improving valuation decision-making: a review of the literature","authors":"Hassan Shuaibu Liman, Abdul-Rasheed Amidu, Deborah Levy","doi":"10.1108/jpif-01-2024-0011","DOIUrl":"https://doi.org/10.1108/jpif-01-2024-0011","url":null,"abstract":"PurposeThe complexity of property valuation, coupled with valuers’ cognitive limitations, makes some degree of error inevitable in valuations. However, given the crucial role that valuations play in the efficient functioning of the economy, there is a need for continuous improvement in the reliability of reported values by enhancing the quality of the decision-making process. The purpose of this paper is to review previous research on valuation decision-making, with particular interest in examining the approaches to improving the quality of valuation decisions and identifying potential areas for further research.Design/methodology/approachThe paper adopts a narrative approach to review 42 research articles that were obtained from Scopus and Web of Science databases and through author citation searches.FindingsOur findings show that existing literature is skewed towards examining the use of technology in the form of decision support systems (DSS), with limited research attention on non-technological (i.e. behavioural) approaches to improving the quality of valuation decisions. We summarise the non-technological approaches and note that much of the discussions on these approaches often appear as recommendations arising from other studies rather than original investigations in their own rights.Practical implicationsWe conclude that studies investigating the effectiveness of the non-technological approaches to improving valuation decision-making are lacking, providing various avenues for further research.Originality/valueThis paper presents the first attempt to provide a comprehensive overview of non-technological approaches to improving the quality of valuation decisions.","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"21 9","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140984237","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 : 2024-05-07DOI: 10.1108/jpif-04-2024-225
Graeme Newell
{"title":"Editorial: Through a referee’s lens","authors":"Graeme Newell","doi":"10.1108/jpif-04-2024-225","DOIUrl":"https://doi.org/10.1108/jpif-04-2024-225","url":null,"abstract":"","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"2 5","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141004839","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 : 2024-04-04DOI: 10.1108/jpif-10-2023-0098
Katharina Oktabec, Nadine Wills
PurposeSustainability has become an integral part of the real estate industry, alongside advancing globalization and demographic development. Due to real estate's influence on greenhouse gas emissions throughout its life cycle, both the regulatory and legal requirements concerning the sustainability of real estate are growing and, as a result of social responsibility, the interest of tenants and investors in sustainable real estate. However, criteria for measuring the ecological sustainability of a real estate investment in the purchase process in order to reduce the risk of including “stranded assets” in the portfolio are missing. This paper aims to address the need to integrate the issue of carbon stranding into existing sustainability rating tools.Design/methodology/approachExisting tools are examined based on defined criteria to determine whether they are suitable for purchasing a property before suitable tools for purchase are compared. Strengths and weaknesses are identified, which are to be remedied with the scoring tool. Taxonomy regulation is integrated into the existing valuation basis as a legal regulation.FindingsThe result is a scoring tool that enables real estate companies to measure and evaluate the ecological sustainability performance of a property during the acquisition process, taking into account the three aspects of sustainability and considering them when determining an appropriate purchase price in line with market conditions. Moreover, the developed tool helps to minimize the risk of acquiring a stranding asset.Research limitations/implicationsThe environmental, social and governance (ESG) framework employed in this study does not incorporate governance considerations. While the analysis extensively evaluates the building's environmental and social aspects, it does not extend to examining the governance practices of the companies involved. Thus, the assessment is confined solely to the physical attributes of the property without accounting for broader corporate governance factors.Practical implicationsThe developed scoring tool represents a valuable tool for the real estate industry, offering insights into sustainability performance during property acquisitions and providing a structured framework for decision-making. By addressing both certification and taxonomy regulation requirements, the tool contributes to the industry's evolution toward more sustainable and environmentally responsible real estate practices.Originality/valueIn response to the growing importance of sustainability in the real estate industry, this paper introduces a novel scoring tool for evaluating the sustainability of real estate investments during the acquisition process.
{"title":"Sustainability scoring tool for real estate according to German and European valuation principles in the purchasing process","authors":"Katharina Oktabec, Nadine Wills","doi":"10.1108/jpif-10-2023-0098","DOIUrl":"https://doi.org/10.1108/jpif-10-2023-0098","url":null,"abstract":"PurposeSustainability has become an integral part of the real estate industry, alongside advancing globalization and demographic development. Due to real estate's influence on greenhouse gas emissions throughout its life cycle, both the regulatory and legal requirements concerning the sustainability of real estate are growing and, as a result of social responsibility, the interest of tenants and investors in sustainable real estate. However, criteria for measuring the ecological sustainability of a real estate investment in the purchase process in order to reduce the risk of including “stranded assets” in the portfolio are missing. This paper aims to address the need to integrate the issue of carbon stranding into existing sustainability rating tools.Design/methodology/approachExisting tools are examined based on defined criteria to determine whether they are suitable for purchasing a property before suitable tools for purchase are compared. Strengths and weaknesses are identified, which are to be remedied with the scoring tool. Taxonomy regulation is integrated into the existing valuation basis as a legal regulation.FindingsThe result is a scoring tool that enables real estate companies to measure and evaluate the ecological sustainability performance of a property during the acquisition process, taking into account the three aspects of sustainability and considering them when determining an appropriate purchase price in line with market conditions. Moreover, the developed tool helps to minimize the risk of acquiring a stranding asset.Research limitations/implicationsThe environmental, social and governance (ESG) framework employed in this study does not incorporate governance considerations. While the analysis extensively evaluates the building's environmental and social aspects, it does not extend to examining the governance practices of the companies involved. Thus, the assessment is confined solely to the physical attributes of the property without accounting for broader corporate governance factors.Practical implicationsThe developed scoring tool represents a valuable tool for the real estate industry, offering insights into sustainability performance during property acquisitions and providing a structured framework for decision-making. By addressing both certification and taxonomy regulation requirements, the tool contributes to the industry's evolution toward more sustainable and environmentally responsible real estate practices.Originality/valueIn response to the growing importance of sustainability in the real estate industry, this paper introduces a novel scoring tool for evaluating the sustainability of real estate investments during the acquisition process.","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"44 3","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140741920","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 : 2024-03-28DOI: 10.1108/jpif-03-2023-0028
C. W. Cheong, Ling-Foon Chan
PurposeThis study aims to investigate the impact of corporate diversification and growth opportunities on the performance of real estate investment trusts (REIT) in Malaysia and Singapore before and during the pandemic.Design/methodology/approachThe sample consists of 33 public-listed REITs across Singapore and Malaysia. A dynamic panel system generalized method of moments (DPS-GMM) estimation is used to account for unobservable factors and a relatively short sample period (2009–2022).FindingsResults indicate that the impact of diversification is contingent on the market where the REIT is based and other institutional factors. The estimates also show that diversified REITs are better able to weather period of economic uncertainty.Practical implicationsWe provided a definitive answer as to why corporate diversification leads to conflicting outcomes – market and institutional factors, strategic intent and the overall economic environment. We also show that the impact of typical firm controls (i.e. free cash, size) can differ. Future firm-level work should thus study similar phenomenon more contextually and carefully consider these varying effects.Originality/valueThe literature is divided on the impact of diversification on firm performance. By using a two-country sample, we show conclusive evidence that this contradictory outcome is due to market and institutional factors. We also show evidence that strategic intent is an important factor that influences the outcomes of diversification, regardless of market. We also infer that excess cash aids the resilience of the firm, contrary to the negative perception of excess cash during normal times. Firm size, in contrast, does not contribute to firm performance during a crisis.
{"title":"Market context matters: the impact of corporate diversification on REIT performance in Malaysia and Singapore","authors":"C. W. Cheong, Ling-Foon Chan","doi":"10.1108/jpif-03-2023-0028","DOIUrl":"https://doi.org/10.1108/jpif-03-2023-0028","url":null,"abstract":"PurposeThis study aims to investigate the impact of corporate diversification and growth opportunities on the performance of real estate investment trusts (REIT) in Malaysia and Singapore before and during the pandemic.Design/methodology/approachThe sample consists of 33 public-listed REITs across Singapore and Malaysia. A dynamic panel system generalized method of moments (DPS-GMM) estimation is used to account for unobservable factors and a relatively short sample period (2009–2022).FindingsResults indicate that the impact of diversification is contingent on the market where the REIT is based and other institutional factors. The estimates also show that diversified REITs are better able to weather period of economic uncertainty.Practical implicationsWe provided a definitive answer as to why corporate diversification leads to conflicting outcomes – market and institutional factors, strategic intent and the overall economic environment. We also show that the impact of typical firm controls (i.e. free cash, size) can differ. Future firm-level work should thus study similar phenomenon more contextually and carefully consider these varying effects.Originality/valueThe literature is divided on the impact of diversification on firm performance. By using a two-country sample, we show conclusive evidence that this contradictory outcome is due to market and institutional factors. We also show evidence that strategic intent is an important factor that influences the outcomes of diversification, regardless of market. We also infer that excess cash aids the resilience of the firm, contrary to the negative perception of excess cash during normal times. Firm size, in contrast, does not contribute to firm performance during a crisis.","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"69 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140371483","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 : 2024-03-21DOI: 10.1108/jpif-11-2023-0104
Graeme Newell, M. Marzuki
PurposeRenewable energy infrastructure is an important asset class in the context of reducing global carbon emissions going forward. This includes solar power, wind farms, hydro, battery storage and hydrogen. This paper examines the risk-adjusted performance and diversification benefits of listed renewable energy infrastructure globally over Q1:2009–Q4:2022 to examine the role of renewable energy infrastructure in a global infrastructure portfolio and in a global mixed-asset portfolio. The performance of renewable energy infrastructure is compared with the other major infrastructure sectors and other major asset classes. The strategic investment implications for institutional investors and renewable energy infrastructure in their portfolios going forward are also highlighted. This includes identifying effective pathways for renewable energy infrastructure exposure by institutional investors.Design/methodology/approachUsing quarterly total returns, the risk-adjusted performance and portfolio diversification benefits of global listed renewable energy infrastructure over Q1:2009–Q4:2022 is assessed. Asset allocation diagrams are used to assess the role of renewable energy infrastructure in a global infrastructure portfolio and in a global mixed-asset portfolio.FindingsListed renewable energy infrastructure was seen to underperform the other infrastructure sectors and other major asset classes over 2009–2022. While delivering portfolio diversification benefits, no renewable energy infrastructure was seen in the optimal infrastructure portfolio or mixed-asset portfolio. More impressive performance characteristics were seen by nonlisted infrastructure funds over this period. Practical reasons for these results are provided as well as effective pathways going forward are identified for the fuller inclusion of renewable energy infrastructure in institutional investor portfolios.Practical implicationsInstitutional investors have an important role in supporting reduced global carbon emissions via their investment mandates and asset allocations. Renewable energy infrastructure will be a key asset to assist in the delivery of this important agenda for a greener economy and addressing global warming. Based on this performance analysis, effective pathways are identified for institutional investors of different size assets under management (AUM) to access renewable energy infrastructure. This will see institutional investors embracing critical investment issues as well as environmental and social issues in their investment strategies going forward.Originality/valueThis paper is the first published empirical research analysis on the performance of renewable energy infrastructure at a global level. This research enables empirically validated, more informed and practical decision-making by institutional investors in the renewable energy infrastructure space. The ultimate aim of this paper is to articulate the potential strategic role of renewable energy infrastruc
{"title":"The performance of renewable energy infrastructure","authors":"Graeme Newell, M. Marzuki","doi":"10.1108/jpif-11-2023-0104","DOIUrl":"https://doi.org/10.1108/jpif-11-2023-0104","url":null,"abstract":"PurposeRenewable energy infrastructure is an important asset class in the context of reducing global carbon emissions going forward. This includes solar power, wind farms, hydro, battery storage and hydrogen. This paper examines the risk-adjusted performance and diversification benefits of listed renewable energy infrastructure globally over Q1:2009–Q4:2022 to examine the role of renewable energy infrastructure in a global infrastructure portfolio and in a global mixed-asset portfolio. The performance of renewable energy infrastructure is compared with the other major infrastructure sectors and other major asset classes. The strategic investment implications for institutional investors and renewable energy infrastructure in their portfolios going forward are also highlighted. This includes identifying effective pathways for renewable energy infrastructure exposure by institutional investors.Design/methodology/approachUsing quarterly total returns, the risk-adjusted performance and portfolio diversification benefits of global listed renewable energy infrastructure over Q1:2009–Q4:2022 is assessed. Asset allocation diagrams are used to assess the role of renewable energy infrastructure in a global infrastructure portfolio and in a global mixed-asset portfolio.FindingsListed renewable energy infrastructure was seen to underperform the other infrastructure sectors and other major asset classes over 2009–2022. While delivering portfolio diversification benefits, no renewable energy infrastructure was seen in the optimal infrastructure portfolio or mixed-asset portfolio. More impressive performance characteristics were seen by nonlisted infrastructure funds over this period. Practical reasons for these results are provided as well as effective pathways going forward are identified for the fuller inclusion of renewable energy infrastructure in institutional investor portfolios.Practical implicationsInstitutional investors have an important role in supporting reduced global carbon emissions via their investment mandates and asset allocations. Renewable energy infrastructure will be a key asset to assist in the delivery of this important agenda for a greener economy and addressing global warming. Based on this performance analysis, effective pathways are identified for institutional investors of different size assets under management (AUM) to access renewable energy infrastructure. This will see institutional investors embracing critical investment issues as well as environmental and social issues in their investment strategies going forward.Originality/valueThis paper is the first published empirical research analysis on the performance of renewable energy infrastructure at a global level. This research enables empirically validated, more informed and practical decision-making by institutional investors in the renewable energy infrastructure space. The ultimate aim of this paper is to articulate the potential strategic role of renewable energy infrastruc","PeriodicalId":506679,"journal":{"name":"Journal of Property Investment & Finance","volume":"82 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140223997","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 : 2024-03-20DOI: 10.1108/jpif-02-2023-0011
Graeme Newell, M. Marzuki
PurposeESG (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.Design/methodology/approachA 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.FindingsThis 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.Practical implicationsWith 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.Originality/valueThis 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.
目的 近年来，环境、社会和治理（Environment, Social, Governance）对所有利益相关者的重要性与日俱增，而在房地产领域，S 维度也更加受到重视。本文提出了一个新的 S 维度指标，用于评估房地产行业在性别平等和文化多样性等方面的改进情况。设计/方法/途径本文提出并验证了 ESG 中新的 S 指标。利用该指标，对澳大利亚主要房地产公司的性别平等和文化多样性实例进行了评估。研究结果这一新的 S 指标在捕捉当今房地产领域 ESG S 维度各方面的变化，尤其是性别平等和文化多样性方面的变化方面，被认为是非常有效和稳健的。随着环境、社会和公司治理（ESG）成为房地产行业的一个关键问题，S 维度所涉及的问题在未来将变得更加重要。这一点至关重要，因为性别平等和文化多样性等 S 维度要素是房地产行业有效运作的重要方面。本文开发的 S 指标可用于长期基准测试，也可用于房地产企业之间、房地产企业内部子部门之间以及与其他行业部门之间的比较。它也适用于所有组织，而不仅仅局限于房地产行业。S 领域的其他衡量标准是一个重要的发展方向，可进一步对房地产行业和更广泛的领域中 ESG S 维度的有效实施情况进行实证评估。这是房地产业各个层面未来发展的关键问题，因为它将促进房地产业更加多元化，房地产投资决策更加有效。这一 S 指标适用于 ESG 的 S 维度非常重要的所有组织部门。
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Pub Date : 2024-03-19DOI: 10.1108/jpif-01-2024-0001
Nikodem Szumilo, Thomas Wiegelmann
PurposeThis paper aims to provide a comprehensive analysis of the transformative impact of Artificial Intelligence (AI) and Large Language Models (LLMs), such as GPT-4, on the real estate industry. It explores how these technologies are reshaping various aspects of the sector, from market analysis and valuation to customer interactions and evaluates the balance between technological efficiency and the preservation of human elements in business.Design/methodology/approachThe study is based on an analysis of the strengths and weaknesses of AI as a technology in applications for real estate. It uses this framework to assess the potential of this technology in different use cases. This is supplemented by an emerging literature on the topic, practical insights and industry expert opinions to provide a balanced perspective on the subject.FindingsThe paper reveals that AI and LLMs offer significant benefits in real estate, including enhanced data-driven decision-making, predictive analytics and operational efficiency. However, it also uncovers critical challenges, such as potential biases in AI algorithms and the risk of depersonalising customer interactions.Practical implicationsThe paper advocates for a balanced approach to adopting AI, emphasising the importance of understanding its strengths and limitations while ensuring ethical usage in the diverse and complex landscape of real estate.Originality/valueThis work stands out for its balanced examination of both the advantages and limitations of AI in real estate. It introduces the novel concept of the “jagged technological frontier” in real estate, providing a unique framework for understanding the interplay between AI and human expertise in the industry.
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