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Salami, Monsurat Ayojimi; Tanrivermiş, Harun; Tanrivermiş, Yeşim
2023 Journal of Property Investment & Finance
doi: 10.1108/jpif-02-2022-0017
This study aims to examine the performance and volatility of Turkey Real Estate Investment Trusts (Turkish REITs) as the world is adjusting to the new normal situation in every aspect of REITs' business activities.Design/methodology/approachThe prices of REITs were acquired from 26 Turkish REITs in this study, but owing to autocorrelation difficulties, 14 Turkish REITs were employed in the analysis. The ten-year long-term bond of the Turkish Government was also utilized and the period of data obtained was based on availability. The performance of Turkish REITs was evaluated using Sharpe's ratio and Treynor's ratio, and the volatility was assessed using MGARCH-BEKK.FindingsThe authors found out that Turkish REITs are constantly underperforming and the REITs' returns remain highly volatile and persistent. In addition, findings showed evidence of volatility clustering and the asymmetric impact of shocks. This study further revealed the uniqueness of each of the Turkish REITs due to the lack of evidence of multicollinearity.Research limitations/implicationsHowever, the limitation of this study is the constraint in obtaining more macro-economic variables of more than ten-years of Turkey's Government bond and the study focused mainly on Turkish REITs.Practical implicationsThe result suggests that since Turkish REITs are not mandatory to payout 90% of taxable earnings as dividends, high performance and an appropriate risk management approach are expected. The need for timely revealing performance of T-REITs and associated uncertainty may trigger better performance as discussed in the relationship between disclosure and performance which is recently emphasized in a recent study by Koelbl (2020). With current performance and associated uncertainty in Turkish REITs, the need to protect Turkish REITs investors is highly essential. The result further educates REIT investors that diversification benefits of REITs tend to reduce in extremely risky situations.Originality/valueThis is the first study in the context of Turkish REITs that comprehensively integrated market capitalization of REITs and simultaneous evaluation of performance and the volatility of the Turkish REITs as the world adjusts to the new normal.
Mpofu, Bekithemba; Moobela, Cletus; Simbanegavi, Prisca
2023 Journal of Property Investment & Finance
doi: 10.1108/jpif-10-2022-0072
This research aims to ascertain the extent to which the coronavirus disease 2019 (COVID-19) epidemic affected the relationship between inflation and real estate investment trusts (REITs) returns in South Africa.Design/methodology/approachThis research used the Johansen cointegration test and effective test in establishing if there is a long-run cointegrating equation between the variables. To ascertain if COVID-19 resulted in a different relationship regime between inflation and REITs returns, the sequential Bai–Perron method was used.FindingsBetween December 2013 and July 2022, there was no evidence of a long-run relationship between inflation and REITs returns, and a restricted vector autoregressive (VAR) model with a period lag for each variable best describing the relationship. Using the sequential Bai–Perron method, for one break, the results show February 2020 as a structural break in the relationship. A cointegrating equation is also found for the period before the structural break and another after the break. Interestingly, the relationship is negative before the break and a new positive relationship (regime) is confirmed after the noted break.Practical implicationsThis research helps REITs stakeholders to position themselves in light of any changes to macroeconomic activity within South Africa.Originality/valueThis is one of the first studies to test inflation relationship with REITs returns in South Africa and the effects of COVID-19 thereof. This research helps REITs stakeholders to position themselves in light of any changes to macroeconomic activity within South Africa.
2023 Journal of Property Investment & Finance
doi: 10.1108/jpif-03-2023-0019
This paper investigates the dynamic nature of risk in pre-, during- and post-COVID duration. It investigates how commercial office portfolio stakeholders in India perceived risk during the COVID pandemic, their risk response and mitigation strategies, and emerging structural changes that would impact the commercial office portfolio (COP) in the post-COVID period.Design/methodology/approachA qualitative and applied research method is adopted for the study. Through purposive sampling, commercial office portfolio stakeholders were selected and interviewed using a semi-structured questionnaire having two parts. In the first part, risk attributes were accessed on the Likert scale and in the second part there were open-ended questions.FindingsThe uncertainty during the COVID period increased the risk perception significantly. There was a sense of urgency to retain the tenants, preserve the headline rentals and keep the properties operational. COP managers were forthcoming to offer rent deferments, common area maintenance discounts and upgrades in the physical office in form of touchless equipment, better air filters, etc. Post-pandemic there would be extensive use of technology and data for facility management and space utilization analytics; mainstreaming of hybrid working and flexible office spaces; increased certification of buildings; adoption of ESG and sustainability norms; and better-designed buildings with a focus on EHS and wellbeing.Practical implicationsIdentifying structural changes in the post-pandemic period will help the COP managers to align their portfolios to the emerging office market requirements.Originality/valueThis study helps in developing an understanding of the dynamic nature of the risk across pre-, during- and post-COVID periods. And risk responses and mitigation strategies adopted during the COVID period in an emerging market.
Fagan, Kevin; Li, Xiaodi; Jabir, Ermengarde; Calanog, Victor
2023 Journal of Property Investment & Finance
doi: 10.1108/jpif-03-2023-0029
The authors take a historical perspective and compare office market performance metrics and CMBS loan delinquency rates over the past two years with previous downturns.Design/methodology/approachWhat will happen to the office sector in the post-pandemic era? we examine this question from three perspectives. First, the authors discuss the (short-term) risk of commercial real estate investment with high inflation and rising interest rates. If investors want to use CRE as an inflationary hedge, the cash flow must increase enough to counteract growing cap rates given rising interest rates.FindingsAs it turns out, the COVID-19 recession has been notably innocuous. Third, the authors focus on medical office space – an emerging investment option for the office sector.Practical implicationsThe authors remain somewhat positive (or at least less downbeat) about the future of the office market based on the data they reviewed.Originality/valueThe office market is experiencing an odyssey rather than an exodus, at least in the short run. However, the authors remain cautious and they are monitoring key signs, prepared for the possibility of (r)evolutionary change in the office sector.
Newell, Graeme; Marzuki, Muhammad Jufri
2023 Journal of Property Investment & Finance
doi: 10.1108/jpif-04-2023-0031
COVID-19 has had a significant global impact at many levels, including an impact on global real estate capital flows. This paper examines the impact of COVID-19 on global real estate capital flows over 2019–2022 to clearly articulate the extent of this impact on global real estate capital flows across regions, countries, major cities, real estate sub-sectors and by major real estate investors. Drivers of these global real estate capital flow changes are also identified. The strategic real estate investment implications of this impact are highlighted, as well as the implications going forward concerning the global real estate strategies for the real estate portfolios held by institutional investors.Design/methodology/approachTo assess the impact of COVID-19, the Real Capital Analytics (RCA) database of global real estate transactions over 2019–2022 is used to drill-out critical details on commercial real estate transactions to explore specific trends in global real estate capital flows in this period of the COVID-19 crisis. This includes real estate capital flows to specific regions, countries, cities, real estate sub-sectors as well as the role of major real estate investors.FindingsThe impact of COVID-19 is clearly shown with the major decline in global real estate capital flows in 2020, with a strong recovery in 2021. Reduced levels of real estate capital flows in 2022 reflect different risk dynamics, where 2022 has seen investors move on from the COVID-19 environment. In 2022, the risk of COVID-19 for real estate has been replaced by global real estate risk factors such as inflation concerns, geopolitical tensions, economic growth concerns, increased cost of debt issues and supply chain issues. This sees COVID-19 now rated as only the 6th most important risk factor in real estate investment decision-making for real estate investors in the Americas, Europe, Middle East and Africa (EMEA) and Asia–Pacific.Practical implicationsThis research has clearly shown the extent of the impact of COVID-19 on global real estate capital flows, as well as identifying the drivers of these real estate capital flow changes. It highlights that real estate investors have moved on and are now prioritising new risk factors ahead of COVID-19 risk. These critical risk factors reflect more recent financial, economic and geopolitical issues, which are key issues in real estate investment decision-making going forward. Investors need to structure these new risk factors into their real estate investment decision-making for the ongoing management of their domestic and international real estate portfolios.Originality/valueThis paper is the first published empirical research analysis of global real estate capital flows during the COVID-19 crisis. This research provides major insights on real estate investment decision-making during this crisis and the strategic changes seen in acquiring real estate portfolios in response to this major global crisis. The change in real estate risk priorities in 2022 as real estate investors move on from the COVID-19 environment is also identified and is clearly reflected in the 2022 global real estate capital flows.
2023 Journal of Property Investment & Finance
doi: 10.1108/jpif-04-2023-0030
The aim of this Real Estate Insight is to comment upon the impact of Covid on the shopping centre sector in the United States of America (USA) and lessons the USA can learn from Latin American shopping centres to survive and thrive.Design/methodology/approachThis Real Estate Insight will comment upon the real estate shopping centre sector. The nature of the “Insights” briefings mean that this is a personal view of the author based on her visit to over 70 shopping centres in Latin America, specifically Brazil, Peru, Chile, Argentina and Paraguay during her 2022 sabbatical.FindingsThis paper looks at shopping centre industry in a transitional post-Covid 19 marketplace and concludes that the shopping centres in Latin American have taken many steps to integrate themselves into the fabric of the community.Practical implicationsThe lessons learnt by owners of shopping centres in Latin America may help other investors with their management strategies in other centres globally.Social implicationsShopping is all about behaviour and social interaction. Vibrant centres encourage the community to use the centre as a focal point.Originality/valueThe value is to suggest strategies to help the shopping centre sector adapt, re-engineer change and thrive through challenging times.