Selection of the organisation mode for international property investments

Purpose: This paper aims to identify different organisation modes for international property investments and analyse the rationales for selecting each mode. Design/methodology/approach: The paper reports the findings of an interview study conducted among international investors in the Finnish property market. Findings: The study identifies four main organisation modes for international property investments, the selection of each mode being dependent of the investors’ perception of the informational barriers and local nature of the property market. Most of the interviewed investors also apply the same strategy in other markets they invest in, and thus the selection of the organisation mode seems not to be very dependent on the characteristics of the investment market.Research limitations/implications: The paper analyses the organisation modes and their selection criteria only in the Finnish market. Practical implications: The study indicates that informational barriers are still of major concern for the investors entering foreign markets. Thus, activities contributing to lowering these barriers would be beneficial for those markets wanting to attract international property investments. Originality/value: The study is the first to analyse the organisation modes of international property investors.Peer reviewe

Property in a mixed asset portfolio

Siirretty Doriast

Motivation and Market Selection of International Investors in Finnish Property Market

The property markets have internationalised rapidly in Europe. This paper investigates the motivation, market selection approach as well as market selection criteria of international property investors through an interview study of foreign investors in the Finnish commercial property market. The findings suggest that the main motivation for international property investments is diversification, but in a conceptual sense rather than in the meaning of Modern Portfolio Theory. In addition, the market selection is driven by factors related to the institutional environment, the general economy and the property market, whereas the role of correlations of asset returns in market selection is small. In addition, market familiarity and factors related to the investment organisation, such as resources, drive market selection

European Listed Real Estate: The Capital Structure Perspective

This paper studies the capital structure decisions of European listed real estate companies, tax-neutral REITs (Real estate investment trusts), and tax-paying entities, REOCs (Real estate operating companies). The practical implications of REITs’ tax neutral status for their capital structure are of utmost interest not only for real estate practitioners, but also for financiers, such as equity holders, banks, and other potential sources of capital. The study concludes that the tax-neutral REITs are significantly less levered than their taxed counterparts, REOCs: Along with tax neutrality, a further potential reason for the structurally less monitored REOCs’ higher leverage could be an attempt to mitigate the potential agency costs with additional debt. The observed pattern in REIT/ REOC leverage is consistent throughout the studied sample

Pricing models of covered bonds—a Nordic study

Covered bonds are an alternative way of investing indirectly in the debt side of real estate, which is beneficial for investors looking for alternatives to government or corporate bonds. Due to the dual nature of the protection offered by covered bonds, they have a justified place in investors' portfolios. This paper studies the pricing of covered bonds and tests it with data gathered from the nordic countries. Using the tested reduced form model, it was possible to price covered bonds with satisfactory results. The estimated model was highly statistically significant and performed according to the economic reasoning behind it. The estimated model also worked well in comparison to research conducted earlier on competing models, such as the structural models.Peer reviewe

Solving the Dirac equation in a two-dimensional spacetime background with a kink

Thesis (S.B.)--Massachusetts Institute of Technology, Dept. of Physics, 2005.Includes bibliographical references (p. 51).In the following paper, I study the Dirac equation in curved spacetime and solve this equation in two-dimensional spacetime backgrounds discovered by Jackiw et al[4], [5]. I will first discuss flat spacetime and introduce the Dirac equation, which describes the relativistic wavefunctions of spin-1/2 particles. I will go on to discuss curved spacetime and introduce the Vierbein field, which will relate an arbitrary curved spacetime to the simpler fiat spacetime. After examining various transformation properties in curved and flat spacetime, I will use the properties to postulate the Dirac equation in arbitrary curved coordinates. By checking the invariance of the Dirac action under both coordinate and Lorentz transformations, I will verify that the postulated Dirac action satisies the proper symmetries and properties that it should. In order to solve the Dirac equation in the spacetime backgrounds found by Jackiw, I will need to examine the equation in the two- and three-dimensional cases. I will then reduce the three-dimensional Dirac equation to two dimensions to describe states independent of the third dimension, because the spacetime backgrounds were derived in an Ansatz which reduced the metric from three to two spacetime dimensions.(cont.) I will then be able to solve the reduced Dirac equation in each of four spacetime backgrounds. The solutions to the first three spacetime backgrounds involve spherical Bessel functions. The last spacetime background has a kink, and its solution involves a hyperbolic cosine function enveloping an oscillatory factor.by Jeffrey Falkenbach.S.B

Development and performance of the public real estate investment sector in Finland

The article studies the development of the public real estate equity sector. The paper describes and analyses the legislative development regarding the sector and the vehicles provided. It discusses the past development of public commercial real estate equity investments in Finland and their role as a market participant. In addition, the paper analyses the historical performance of the sector.Peer reviewe

Dynamik der Radonfolgeprodukt-Aktivität imSpeichel nach therapeutischer Radon-Exposition

Radon decay product activity was measured in saliva of 10 male patients 20-30 min after a 1-hour radon exposure in the gallery of the Gasteiner Heilstollen (radon activity 36.2 kBq/m(3), radon progeny activity 20.3 kBq/m(3)), in 1 patient showing relatively high activity (75th percentile) measurements were continued until 65 min after exposure. Patients were asked to collect about 2 mi of saliva in the mouth and produce it on a filter. After drying the filter at 300 degrees C, radon progeny activity was measured. Activity (median) at 20-30 min after leaving the treatment area was 4.5 Bq (25th percentile 1 Bq; 75th percentile 21 Bq). In the patient who underwent additional measurements the activity showed a further increase up to 29 Bq (35 min after radon exposure) before it continuously decreased to a very low activity (1-3 Bq) at 65 min after exposure. The results show that a significantly increased radon decay product activity is found in saliva after speleotherapeutic radon exposure. Maximum values were observed 35 min after radon exposure. Radon decay product activity almost disappeared after about 1 h

Development of Commercial Real Estate Valuation in Finland

The objective of this paper is to ascertain how real estate valuation service developed in Finland from the late 1980’s till the end of 2007 and which factors contributed to this development. The discussion is based on literature review and in-depth interview study with 29 long-term professionals of the Finnish real estate field. This study suggests that the development of real estate valuation service in Finland can be divided into four periods in which valuation has been by its nature and business environment different. These periods include the economic boom of the late 1980’s, the recession period, the recovery of the economy and the time of internationalisation. During these periods commercial real estate valuation service developed to professional business. This article discusses the development of real estate valuation service from the viewpoints of valuation business and players, authorized valuers’ system, standards for valuation and financial reporting as well as some other development aspects of real estate valuation such as valuation document and methods

Bank liquidity management through the issuance of bonds in the aftermath of the global financial crisis

Next to deposits, European banks have historically largely used bank obligations such as covered bonds (CB). Their US counterparties, on the contrary, heavily rely on securitization to fund mortgages. We assess how banks’ liquidity and funding position during and after the Global Financial Crisis (GFC) affects the decision to issue (private label) mortgage backed securities (MBS), covered bonds or senior unsecured bonds. Since the decisions to issue either instrument are not necessarily independent from each other, we estimate conditional probit and tobit models in order to account for the simultaneous nature of the issuances. We see that neither instrument plays any role in liquidity management during the GFC. In the post-GFC period, banks reach out to issuing MBS when facing short-term illiquidity. Banks could issue MBS as a way to comply with Basel III liquidity regulations. In turn, a bank’s decision to issue CB is not affected by bank’s liquidity and liquidity management occurs instead through managing the amount of CB. The issuance of SUB is also not affected by liquidity. Overall, the paper shows that only MBS have actively been issued as a response to liquidity shortages of banks’ balance sheets and shows that MBS and CB which often are seen as alternative instruments serve different purposes