Assessing Risk for International Real Estate Investments

Overseas real estate investment has increased considerably in recent years. The assessment of risk for these investments, especially for real estate, has thus become very important. This study assesses the performance of real estate, stocks and bonds in the U.S., Canada, the United Kingdom, Australia, and New Zealand over the period 1985-93. The results indicate that the degree of appraisal-smoothing and intertemporal correlation in each of the five international real estate series is significant, resulting in the need to increase the real estate risk estimates by 34% to 47%. To account for currency risk over this nine-year period, currency-adjusted returns and risk were also estimated for investors from each of these five countries. All risk profiles increased significantly for international investors when adjusting for currency risk. However, additional portfolio diversification was achieved using real estate for international investors.

Analysing Uk Real Estate Market Forecast Disagreement

Given the significance of forecasting in real estate investment decisions, this paper investigates forecast uncertainty and disagreement in real estate market forecasts.  Using the Investment Property Forum (IPF) quarterly survey amongst UK independent real estate forecasters, these real estate forecasts are compared with actual real estate performance to assess a number of real estate forecasting issues in the UK over 1999-2004, including real estate forecast error, bias and consensus. The results suggest that real estate forecasts are biased, less volatile compared to market returns and inefficient in that forecast errors tend to persist.    The strongest finding is that real estate forecasters display the characteristics associated with a consensus indicating herding.Real Estate Forecasting, Forecast Accuracy, Forecast Disagreement, Consensus.

Private Property Vehicles: The Valuation of Interests in Limited Partnerships

This paper examines the extent to which the valuation of partial interests in private property vehicles should be closely aligned to the valuation of the underlying assets.    A sample of vehicle managers and investors replied to a questionnaire on the qualities of private property vehicles relative to direct property investment. Applying the Analytic Hierarchy Process (AHP) technique the relative importance of the various advantages and disadvantages of investment in private property vehicles relative to acquisition of the underlying assets are assessed.  The results suggest that the main drivers of the growth of the this sector have been the ability for certain categories of investor to acquire interests in assets that are normally inaccessible due to the amount of specific risk.  Additionally, investors have been attracted by the ability to ‘outsource’ asset management in a manner that minimises perceived agency problems.  It is concluded that deviations from NAV should be expected given that investment in private property vehicles differs from investment in the underlying assets in terms of liquidity, management structures, lot size, financial structure inter alia.  However, reliably appraising the pricing implications of these variations is likely to be extremely difficult due to the lack of secondary market trading and vehicle heterogeneity. Private Property Vehicles, PPV, Valuation

An Evaluation Of The Performance Of UK Real Estate Forecasters

Given the significance of forecasting in real estate investment decisions, this paper investigates forecast uncertainty and disagreement in real estate market forecasts. It compares the performance of real estate forecasters with non-real estate forecasters. Using the Investment Property Forum (IPF) quarterly survey amongst UK independent real estate forecasters and a similar survey of macro-economic and capital market forecasters, these forecasts are compared with actual performance to assess a number of forecasting issues in the UK over 1999-2004, including forecast error, bias and consensus. The results suggest that both groups are biased, less volatile compared to market returns and inefficient in that forecast errors tend to persist. The strongest finding is that forecasters display the characteristics associated with a consensus indicating herding.Real Estate Forecasting, Forecast Accuracy, Forecast Disagreement, Individual Forecast, Consensus

Effect of Phytophthora cinnamomi on the habitat utilization of Antechinus stuartii in a Victorian forest

Phytophthora cinnamomi (Cinnamon fungus) is a pathogenic soil fungus which infects plant communities along the south-eastern coast of Australia, and the south-western corner of Western Australia. The symptoms of this disease include chlorosis, death of branches (ie. ‘dieback’), retarded growth and the eventual death of infected plants. This leads to devastating effects upon plant communities by altering both the structural and floristic characteristics of these communities. Small mammal species are dependent on specific features of their habitat such as vegetation structure and floristics. This thesis investigated alterations to the habitat of the insectivorous marsupial mouse, Antechinus stuartii, due to the presence of P. cinnamomi. The study was undertaken in an area of an open forest in the Brisbane Ranges, Victoria. Significant changes were found in both the floristic composition and structure of the vegetation at study sites infected with P, cinnamomi, compared to uninfected sites. The habitat utilization by A. stuartii of uninfected and infected vegetation was investigated using live trapping and radio-telemetric techniques. Capture rates were higher at sites uninfected by P. cinnamomi, and both male and females selected areas free from infection. Home range areas of males were significantly larger than those of females as assessed by telemetry. Both sexes spent a high proportion of time in areas dominated by Xanthorrhoea australis (Austral grass tree). There were significant relationships between the abundance of A. stuartii and the denseness of vegetation above 1 metre in height, and in particular, the proportion of cover afforded by X. australis. There were no significant differences in the cover of Eucalyptus spp. between uninfected and infected sites, but there were significantly more nest hollows in infected areas. The abundance of invertebrates was examined using pitfall traps. There were no significant differences in the abundance of the larger invertebrate taxa at infected and uninfected sites, but higher abundances of some micro-invertebrate groups in infected areas were recorded. The most likely factors considered to be influential in the habitat selection of A. stuartii were vegetation structure, and the presence of X. australis. To assess whether these factors were important the leaves of X. australis were removed with a brushcutter, to mimic the early effects of infection with P. cinnamomi. Animals did not respond to the alteration of vegetation structure in the short term (3-4 days). Longer-term experiments are required to assess the habitat utilization of A. stuartii at different periods following habitat manipulation. The implications of the presence of P. cinnamomi on the conservation of fauna are discussed. The destructive nature of the pathogen, and the slow rate of recovery from the disease, means that P. cinnamomi can be considered a threatening process to plant communities and the fauna that reside within that habitat. Future management of this disease within natural areas must therefore be cognisant of the potential of P. cinnamomi to significantly affect faunal as well as vegetative communities

The significance and performance of French REITs (SIICs) in a mixed-asset portfolio

Purpose: REITs have taken on increased significance in Europe in recent years, with French REITs (Societe d'Investissement Immobilier Cotee (SIICs)) becoming an important property investment vehicle since 2003. The purpose of this paper is to assess the significance, risk-adjusted performance and portfolio diversification benefits of SIICs in a mixed-asset portfolio context in France over 2003-2012. The impact of the global financial crisis (GFC) on SIICs and their post-GFC recovery are also assessed. Design/methodology/approach: Using monthly total returns, the risk-adjusted performance and portfolio diversification benefits of SIICs over 2003-2012 are assessed, with efficient frontiers and asset allocation diagrams used to assess the role of SIICs in a mixed-asset portfolio. Sub-period analyses are conducted to assess the impact of the GFC on SIIC performance, as well as their post-GFC recovery. Findings: SIICs delivered superior risk-adjusted returns compared to stocks over 2003-2012, but with limited portfolio diversification benefits with stocks and more portfolio diversification benefits with bonds. In the post-GFC period, SIICs have delivered enhanced risk-adjusted returns, but with no recovery in their portfolio diversification benefits with stocks. SIICs are seen to contribute significantly to the mixed-asset portfolio across the risk spectrum in the post-GFC period. Practical implications: SIICs are a significant REIT market at the French, European and global REIT levels. The results highlight the role of SIICs in a French mixed-asset portfolio. The strong risk-adjusted performance has highlighted the robustness of SIICs; particularly compared to French stocks, and the contribution of SIICs in a French mixed-asset portfolio across the portfolio risk spectrum. This contribution by SIICs has been further reinforced in the post-GFC period. Originality/value: This paper is the first published empirical research analysis of the risk-adjusted performance of SIICs and the role of SIICs in a mixed-asset portfolio. Given the increased significance of REITs in Europe, this research enables empirically validated, more informed and practical property investment decision-making regarding the role of SIICs in a mixed-asset portfolio; particularly in the post-GFC period

The development and initial performance analysis of REITs in Ireland

Purpose – The inception of REITs in Ireland in 2013 presented an additional property investment opportunity to Ireland’s commercial property investment landscape. Importantly, the Irish REIT market is an institutional apparatus with an objective to rejuvenate Ireland’s commercial property market. The purpose of this paper is to provide an empirical validation of the performance of Irish REITs over the period March 2015 to February 2019 across several investment measures such as risk-adjusted returns and diversification benefits. Design/methodology/approach – Using monthly total returns in local currency, the risk-adjusted performance and portfolio diversification attributes of Irish REITs are assessed. The mean-variance framework is utilised to assess the potential added-value benefits of Irish REITs in a mixed-asset portfolio. Findings – Irish REITs delivered the strongest average annual return performance, lower relative volatility vs the stock market and competitive overall risk-adjusted performance. The results affirm the characteristic of Irish REITs as a total return-focussed income-driven property investment asset class. The optimal asset allocation analysis shows that Irish REITs are an important ingredient in a mixed-asset investment framework, as their allocation could be scaled effectively across the portfolio risk-return spectrum. Practical implications – Irish REITs are an emerging investment opportunity for investors seeking exposure in the strongly performing property market in Ireland in the post-Global Financial Crisis period. They are also regarded as an effective alternative conduit to private investment routes (i.e. direct property and non-listed property funds), with the added advantage of being more liquid and versatile than their private property investment counterparts. Importantly, Irish REITs fulfilled the purpose for which they were originally designed. The promising initial performance observed in this paper gives a useful context to what the future might hold for Irish REITs, given the strong interest for commercial property assets in Ireland from both local and cross-border property investors. Originality/value – This paper is the first empirical research aimed at providing an initial empirical performance validation of Irish REITs as an effective route to commercial property exposure in Ireland. This research enables empirically validated, more informed and practical property investment decision making regarding the strategic role of Irish REITs in a portfolio

HIV prevention for South African youth: which interventions work? A systematic review of current evidence

In South Africa, HIV prevalence among youth aged 15-24 is among the world's highest. Given the urgent need to identify effective HIV prevention approaches, this review assesses the evidence base for youth HIV prevention in South Africa

The Performance and Diversification Potential of Non-Listed Value-Add Real Estate Funds in Japan

Acknowledgments: The authors acknowledge the generous support of ANREV, MSCI and Real Capital Analytics in providing the necessary data for analysis. They are also grateful for the constructive comments by four reviewers.Peer reviewedPublisher PD