A Note on Corporate Overseas Investment Decision Priorities of Taiwanese Direct Real Estate Investors

Data generated from a situationally adapted analytical hierarchical process (AHP) questionnaire focusing on two politically confrontational countries (the People's Republic of China and the Republic of China on Taiwan), provides a revealing assessment of the decisionmaking priorities for three types of direct foreign investment, namely wholly foreign-owned subsidiaries (WFSs), equity joint ventures (EJVs) and contractual joint ventures (CJVs). Cross-case comparison shows distinctly different priorities among the three types for the two countries, and that country selection entails more caution than does the subsequent selection of city. Whereas political environment factors are of only marginal importance for domestic decisions, they are of primary consideration in overseas investment decisions.

The Assessment of Real Estate Initiatives to Be Included in the Socially-Responsible Funds

The acknowledgment of the ongoing economic and financial crisis involving real estate, creates the need to formulate proposals and scenarios (in real estate) with the characteristics of socially responsible investments. These kind of investments aim towards “sustainable” development both environmentally (safeguarding the shortage of resources such as land, energy, and natural elements), and socially (protecting the population and raising its level of well-being) according to so-called “ethical finance”, instead of a mere “speculative” investment. Effectively, real estate is still an investment sector only marginally explored by the socially-responsible funds. Based on these premises, this paper will: (i) briefly analyze the nature of socially-responsible investments, setting their characteristics apart from “traditional investments”; and (ii) propose a possible procedure (of the multi-criteria type) which aims to assess socially-responsible investments in real estate. This will be applied to a case study regarding a social housing initiative in the municipality of Anguillara Sabazia (Rome, Italy)

Investment in property by Australian superannuation schemes

The superannuation sector in Australia accounts for close to AUD 2.5 trillion, representing major institutional investors in both a local and global context, of assets under management (AUM) in Australia's managed fund industry. This level of AUM makes up the majority of AUM in the industry. Over the past few decades, superannuation schemes have come to regard property as a key asset class to include in their multi-asset portfolios. This thesis explores the decision-making made by superannuation schemes when investing in property. lt does this by identifying the main criteria used in this decision-making through a survey process and rigorous analysis. To establish a background for the research in the thesis, an overview of the superannuation industry and descriptive case studies are undertaken to provide an understanding of the property exposure and allocation strategies of Australian superannuation schemes and overseas pension funds. The level of investment in direct property and indirect property, that is unlisted property funds and separate accounts, and listed property, is analysed. This background and the literature review on previous decision-making surveys allow seven independent factors and twentytwo independent sub-factors to be identified as the main criteria influencing the property investment decision-making process by institutional investors. The questionnaire models used in previous surveys did not allow respondents to indicate their level of preference for each of the factors and sub-factors. Consequently, a multi-criteria decision-making model was adopted to construct questions where respondents used pair-wise comparisons to indicate the importance of each factor or sub-factor relative to another factor or sub-factor. This allowed degrees of importance for each factor or sub-factor to be established. Two sample groups, superannuation schemes and wholesale property funds, are surveyed by way of face-to-face interviews. A broad range of non-profit superannuation schemes of different sizes were surveyed, with the respondents being a chief investment officer or investment manager. As property is such an expensive asset to invest in, superannuation schemes often invest in wholesale property funds to obtain property exposure. Consequently, managers of wholesale property funds that invest on behalf of superannuation schemes in direct property were also surveyed. While time and travel restrictions limited the number of superannuation schemes and wholesale property funds that could be surveyed, the AHP methodology allows reliable and consistent findings to be generated from the survey responses. Strategic decision-making is found to be the main factor influencing property investment by the superannuation schemes and wholesale property funds. The degree of importance placed on strategic decision-making by the survey respondents is considerably higher than the degree of importance they place on the other factors. This is in contrast to previous surveys undertaken over the past fifty years, which identified property type and location as the main factors influencing decisionmaking. Core, risk-adjusted return and return are found to be the main sub-factors. Previous surveys had ranked return analysis above risk-adjusted analysis. The responses by sub-groups of the superannuation schemes and the wholesale property funds were also analysed. Four significant differences were found to exist between the responses made by the superannuation scheme sub-groups, which are small, medium and large superannuation schemes. The differences are for two factors, property type and investment style, and two sub-factors, return analysis and local experience. Restrictive mandates and the lower level of funds held by the smaller superannuation schemes relative to the larger superannuation schemes could be reasons for these differences. Only one significant difference existed between the sub-group responses made by the diversified, retail, office and industrial wholesale property funds. lt was for the sub-factor unlisted property fund. This thesis contributes in three ways to the limited knowledge currently available on property investment decision-making by institutional investors. Firstly, it provides an in-depth analysis of the current strategic property allocation by superannuation schemes. Secondly, it identifies the main decision-making factors and sub-factors. Lastly, differences in the decision-making by the sub-groups of superannuation schemes and wholesale property funds are found to exist. Future research should be undertaken on the main factors and sub-factors identified in this thesis, to find out why they are so important. The reasons for the differences between the sub-groups decision-making should also be researched to establish if they affect the returns on their investment in property

Project Finance and MCDM financial models: An application in renewable energy projects

Tesis por compendio[EN] Academics, managerial and policy making community reinforce that renewable energy investments are one of the most effective instruments to attain CO2 emission reduction targets set by the Kyoto Protocol and by the recent Paris Agreement signed at the Paris climate conference (COP21) in December 2015 in which 195 countries adopted the first-ever universal, legally binding global climate deal. The problem of financing Renewable Energy (RE) projects has become a crucial issue for private and public decision makers worldwide. Budget constraints from governments and limited bank lending capacities have led to a reconsideration of the traditional financial instruments in the RE sector. The lack of credit makes impossible for commercial banks to fund RE projects with traditional loans. Research on new financing techniques for RE projects, such as Project Finance (PF) has gained interest in recent years. PF is a recent technique applied in large investments projects. During the last decades of the 20th century new public private partnership schemes enabled large infrastructure, energy and environmental projects. In these sectors PF has been used to reduce cost agency conflicts and better risk management. There is a wide number of contributions underlying the relevance of RE, however there is a lack of research on the financial aspects of RE projects. This research aims to make several contributions. First, to provide a better understanding of the PF technique and its use in the RE sector. Second, to fill the gap of research on financial aspects of RE in the literature by reviewing contributions of MCDM to RE project evaluation from the investor's perspective. Third, we propose a MPDM Moderate Pessimism Decision Making model, which adds to the rational financial evaluation of investment opportunities a set of non-financial factors that affects the investor's decisions. Finally, within the illustrative example, we apply this multi-criteria decision making process to help banks to decide if they must join a project or not.[ES] Investigadores, comunidad empresarial y clase política destacan que la inversión en energías renovables es uno de los instrumentos más efectivos para alcanzar los objetivos de reducción de CO2 establecidos por el reciente acuerdo firmado en la conferencia de Paris (COP21) en diciembre de 2015, en el cual, 195 países adoptaron el primer acuerdo universal y jurídicamente vinculante de la historia. El problema de la financiación de los proyectos de energía renovable (RE) es un tema crucial para cualquier decisor público o privado. Las limitaciones presupuestarias de los gobiernos y la falta de crédito han provocado que se reconsideren los instrumentos de financiación en el sector de las RE, por lo tanto, la investigación en nuevas técnicas de financiamiento para los proyectos de RE, como Project Finance (PF) ha ganado interés en los últimos años. PF es una técnica que se aplica en grandes proyectos de inversión. A finales del Siglo XX, los nuevos esquemas de colaboración público-privadas han permitido llevar a cabo grandes proyectos de infraestructuras y de RE. En estos sectores, el PF se ha utilizado para reducir costes, conflictos y mitigar riesgos. Numerosas contribuciones científicas subrayan la importancia de la RE, sin embargo hay un vacío en la investigación sobre los aspectos financieros de los proyectos de RE. Esta tesis tiene como objetivo aportar varias contribuciones. En primer lugar, proporcionar una mejor comprensión de la técnica del PF y su uso en el sector de las RE. En segundo lugar, cubrir el vacío existente en la literatura sobre la investigación de los aspectos financieros de las RE mediante la revisión de las contribuciones sobre MCDM para la evaluación de los proyectos de RE desde el punto de vista del inversor. En tercer lugar, se propone un modelo MPDM (Moderate Pessimism Decision Making), el cual añade a la evaluación financiera racional de oportunidades de inversión, un conjunto de factores no financieros que afectan a las decisiones de los inversores. Finalmente, se aplica este modelo multicriterio de toma de decisiones para ayudar a decidir a los bancos si deben unirse al proyecto.[CA] Investigadors, comunitat empresarial i classe política, destaquen que la inversió en energies renovables és un dels instruments més efectius per assolir els objectius de reducció de les emissions de CO2 establerts pel recent acord signat a la conferència de Paris (COP21) al desembre de 2015, mitjançant el qual, 195 països van adoptar el primer acord universal i jurídicament vinculant de la història. El problema del finançament dels projectes d'energia renovable (RE) s'ha convertit en un tema crucial per a qualsevol decisor públics i privats. Les limitacions pressupostàries dels governs i La falta de crèdit han provocat que es reconsiderin els instruments de finançament en el sector de les RE, per tant, la investigació en noves tècniques de finançament per als projectes de RE, com el Project Finance (PF) ha guanyat interès en els últims anys. PF és una tècnica que s'aplica en grans projectes d'inversió. Durant les últimes dècades del Segle XX, els nous esquemes de col-laboració publico-privades han permès portar a terme grans projectes d'infraestructures i de RE. En aquests sectors, el PF s'ha utilitzat per reduir costos, conflictes i gestionar millor els riscos. Existeixen nombroses contribucions científiques que subratllen la importància de la RE, però hi ha un buit en la investigació pel que fa als aspectes financers dels projectes de RE. Aquesta tesis té com a objectiu aportar diverses contribucions. En primer lloc, proporcionar una millor comprensió de la tècnica del PF i el seu ús en el sector de les RE. En segon lloc, cobrir el buit existent en la literatura sobre la investigació dels aspectes financers de les RE mitjançant la revisió de les contribucions sobre MCDM per a l'avaluació dels projectes de RE des del punt de vista de l'inversor. En tercer lloc, es proposa un model MPDM Moderate Pessimism Decision Making, que afegeix a l'avaluació financera racional d'oportunitats d'inversió, un conjunt de factors no financers que afecten les decisions dels inversors. Finalment, mitjançant un exemple il-lustratiu, s'aplica aquest model multicriteri de presa de decisions per ajudar a decidir als bancs si han de unir-se al projecte.Mayor Vitoria, F. (2016). Project Finance and MCDM financial models: An application in renewable energy projects [Tesis doctoral no publicada]. Universitat Politècnica de València. https://doi.org/10.4995/Thesis/10251/73067TESISCompendi

An Approach to Prioritizing the Commercial Real Estate Development Risk

After 30 years of war in Sri Lanka, the demand for real estate has increased tremendously across the nation. Similarly, numerous real estate sub-sectors have avidly participated in the worldwide boom. However, with failures and poor functioning of many investment projects, the industry's risk management reputation has been put in jeopardy, followed by the coronavirus (COVID-19). Though it is less popular among Sri Lankan property developers, risk management strategies in development projects have become a pressing requirement. This paper's goal is to look at commercial property development risk elements from the perspective of a real estate developer in relation to Social, Economic, Environmental, Technological, Political, and Pandemic Risks. The research first evaluates risk variables using a super decision software model based on the Analytic Hierarchy Process (AHP), then prioritizes the most important risk factors, and lastly examines effective risk management measures for successful real estate developments. The data collection has been carried out using interviews through telephone conversations with the help of a structured questionnaire. Accordingly, 35 risk factors have been assessed altogether. For the three projects, the synthesized values were 1.0000, 0.510763, and 0.604037, respectively. Based on the analysis of superMatrix calculation, project A is regarded as the best alternative project in such circumstances. Pandemic Risk, Economic Risk, and Political Risk have all had a significant impact on the primary risk criteria. Therefore, COVID-19 Pandemic Risk Emergence, Workforce Availability, Duration, Delays in Council Approval/License Approval Process and Natural Disaster Impact were identified as the highest influenced sub-risk factors. Identifying the risk factors on this avenue will also help in making better investment decisions while increasing the unpredictable nature of the real estate field and future satisfaction of loan team investment goals within the country

An Approach to Prioritizing the Commercial Real Estate Development Risk

After 30 years of war in Sri Lanka, the demand for real estate has increased tremendously across the nation. Similarly, numerous real estate sub-sectors have avidly participated in the worldwide boom. However, with failures and poor functioning of many investment projects, the industry's risk management reputation has been put in jeopardy, followed by the coronavirus (COVID-19). Though it is less popular among Sri Lankan property developers, risk management strategies in development projects have become a pressing requirement. This paper's goal is to look at commercial property development risk elements from the perspective of a real estate developer in relation to Social, Economic, Environmental, Technological, Political, and Pandemic Risks. The research first evaluates risk variables using a super decision software model based on the Analytic Hierarchy Process (AHP), then prioritizes the most important risk factors, and lastly examines effective risk management measures for successful real estate developments. The data collection has been carried out using interviews through telephone conversations with the help of a structured questionnaire. Accordingly, 35 risk factors have been assessed altogether. For the three projects, the synthesized values were 1.0000, 0.510763, and 0.604037, respectively. Based on the analysis of superMatrix calculation, project A is regarded as the best alternative project in such circumstances. Pandemic Risk, Economic Risk, and Political Risk have all had a significant impact on the primary risk criteria. Therefore, COVID-19 Pandemic Risk Emergence, Workforce Availability, Duration, Delays in Council Approval/License Approval Process and Natural Disaster Impact were identified as the highest influenced sub-risk factors. Identifying the risk factors on this avenue will also help in making better investment decisions while increasing the unpredictable nature of the real estate field and future satisfaction of loan team investment goals within the country

SDG scoring : an analytic hierarchy process approach

The demand for non-financial information has substantially risen in the last few years. Previously, investors only considered financial information on their investment decisions but there is an increased perception that non-financial factors might provide an additional framework on which firms can be measured, which can positively impact their investment success. Due to this, multiple rating agencies have risen as providers of scores reflecting the Environmental, Social and Governance (ESG) position of firms. However, they often seen as not providing the adequate theoretical reasoning and methodological clarity, which in addition to the lack of a consensus on ESG criteria, creates the space for the development of another scoring system with a robust and clear sustainability framework underlying it. Additionally, following the implementation of the Corporate Sustainability Reporting Directive (CSRD), a broader set of firms are required to report on their environmental and social impacts. This might create an information disadvantage for non-CSRD covered firms, which has led these firms to also have the desire to report on these issues. This dissertation presents the development process of a scoring system on which non-financial performance is measured through the Sustainable Development Goals (SDGs), i.e., a robust framework and that combines both financial and non-financial information in a single value, through Multi-Criteria Decision Making, namely, the Analytic Hierarchy Process (AHP). Additionally, it also provides a base framework for firms ESG reporting.Recentemente, a procura por informação não financeiro aumentou bastante. Previamente, os investidores apenas consideravam informação financeira nas suas decisões de investimento, mas há uma crescente perceção de que fatores não financeiros podem fornecer um quadro adicional para a avaliação das empresas, podendo impactar positivamente o sucesso dos seus investimentos. Devido a isso, múltiplas agências de classificação surgiram como provedoras de pontuações que refletem a posição Ambiental, Social e de Governança (ASG) das empresas. No entanto, estas não fornecem o raciocínio teórico e clareza metodológica por trás dessas pontuações, o que, além da diferente definição de critérios ASG entre elas, cria espaço para o desenvolvimento de um outro sistema de pontuação com um quadro de sustentabilidade robusto e claro. Além disso, após a implementação da Diretiva de Relato de Sustentabilidade Corporativa (DRSC), um conjunto mais amplo de empresas é obrigado a relatar sobre os seus impactos ambientais e sociais. Isto pode criar uma desvantagem de informação para as empresas não cobertas pela DRSC, o que levou essas empresas a também terem o desejo de relatar sobre estas questões. Esta Tese apresenta o processo de desenvolvimento de um sistema de pontuação no qual o desempenho não financeiro é medido por meio dos Objetivos de Desenvolvimento Sustentável e que combina informações financeiras e não financeiras num único valor, por meio do processo de tomada de decisão multicritério, nomeadamente, o Processo Analítico Hierárquico (PAH). Além disso, também fornece um quadro básico para o relato ASG das empresas

A semantic Bayesian network for automated share evaluation on the JSE

Advances in information technology have presented the potential to automate investment decision making processes. This will alleviate the need for manual analysis and reduce the subjective nature of investment decision making. However, there are different investment approaches and perspectives for investing which makes acquiring and representing expert knowledge for share evaluation challenging. Current decision models often do not reflect the real investment decision making process used by the broader investment community or may not be well-grounded in established investment theory. This research investigates the efficacy of using ontologies and Bayesian networks for automating share evaluation on the JSE. The knowledge acquired from an analysis of the investment domain and the decision-making process for a value investing approach was represented in an ontology. A Bayesian network was constructed based on the concepts outlined in the ontology for automatic share evaluation. The Bayesian network allows decision makers to predict future share performance and provides an investment recommendation for a specific share. The decision model was designed, refined and evaluated through an analysis of the literature on value investing theory and consultation with expert investment professionals. The performance of the decision model was validated through back testing and measured using return and risk-adjusted return measures. The model was found to provide superior returns and risk-adjusted returns for the evaluation period from 2012 to 2018 when compared to selected benchmark indices of the JSE. The result is a concrete share evaluation model grounded in investing theory and validated by investment experts that may be employed, with small modifications, in the field of value investing to identify shares with a higher probability of positive risk-adjusted returns