We investigate the impact of governmental restrictions on the short-term risk perception, as proxied by the going-in cap rate, of investors in regional and neighborhood shopping centers. We use the ...COVID-19 pandemic as a natural experiment and proxy for the length and severity of COVID-19 restrictions with the political affiliation of state governors. Using a sample of 40 metropolitan statistical areas (MSAs) across 27 states over the period of 2018 to 2021, we find that for states with Republican governors, which proxy for shorter and fewer COVID-19 restrictions, investors in regional malls required a lower going-in cap rate in the pandemic period than for states with Democratic governors. This effect does not exist for neighborhood shopping centers, whose tenants were not as affected by COVID-19 restrictions. Robustness checks suggest that our findings can be explained with mask mandates as one type of governmental restrictions, and that COVID-19 related restrictions do not impact the long-term risk perception of retail real estate investors. We furthermore find that the political attitudes of an MSA have an impact on investor risk perception.
Taking as its focus the growth of Real Estate Investment Trusts (REITs) in France, this paper explores the remaking of the French property market in both conceptual and concrete terms. In doing so, ...it reconstructs how public bodies of the national state, in interaction with domestic property companies, have reconfigured the French urban property sector by (i) introducing new market regulations and tax decrees; (ii) enabling French REITs to engage in property development; (iii) creating a REIT within the state; and by (iv) initiating the large-scale urban redevelopment project of Grand Paris in which French REITs manifest themselves as urban partners. By paying attention to the relative importance of national regulatory state power within, what is after all, a multi-scalar state system, the paper unravels how the introduction of REITs has shaped and reshaped (i) finance and property markets; (ii) the urban built environment; and (iii) the state apparatus itself. The paper concludes that the French state has created a financialized urban governance regime in which REITs, of which one is publicly owned, exercise considerable autonomy. As such, it makes a historical-analytical contribution to the debate on the financialization of urban development, and the role of the state in this process.
The authors propose that attempts to increase consumers' objective knowledge (OK) regarding financial instruments can deter willingness to invest when such attempts diminish consumers' subjective ...knowledge (SK). In four studies, the authors use different SK manipulations and investment products to show that investment decisions are influenced by SK, independent of OK. Specifically, they find that (1) willingness to pursue a risky investment increases when SK is high (vs. low) relative to a prior investment choice (Study 1); (2) willingness to enroll in a retirement saving program is enhanced by asking consumers an easy (vs. difficult) question about finance, thereby increasing SK (Study 2); (3) technically elaborating information about a mutual fund diminishes SK regarding that investment and decreases choice of that fund (Study 3); and (4) consumers invest less money in funds when missing information is made salient, holding the objective investment information constant (Study 4). Furthermore, the effects in Studies 2-4 are mediated by participants' self-rated SK. The authors propose that effective financial education must focus not only on imparting relevant information and enhancing OK but also on promoting higher levels of SK.
In many parts of Africa, societies that remain primarily rural are experiencing accelerated urban growth and highly visible booms in property development. In the absence of significant ...industrialization, investment is pouring directly into what Lefebvre and Harvey characterized as the ‘secondary circuit’ of capital. Debates about the drivers of investment in real estate are longstanding in relation to the global North, but have given little consideration to low‐income and late‐urbanizing countries in Africa. Yet such contexts offer important opportunities to reflect on existing theory. Focusing on Kigali and Addis Ababa (both transformed virtually beyond recognition over the past two decades), this article explores the drivers and consequences of investment in urban real estate in countries striving to structurally transform their economies. It argues that a range of formal and informal incentives and constraints have led to high‐end real estate being viewed as the ‘safest bet’ for those with resources to invest, even where demand is limited and governments are promoting other kinds of investment. While some people are reaping urban fortunes in largely untaxed rents, much of the construction is purely speculative, creating landscapes of unused and underused high‐end properties in contexts where investment is desperately needed elsewhere.
Ku Swee Yong's Real Estate Riches, Building Your Real Estate Riches and Real Estate Realities have become a valuable resource for property investors in Singapore during the past few years. In his new ...book, he takes stock of the prolonged downturn and weak market conditions and offers useful defensive strategies in the face of supply gluts and weakening prices. The lead article warns of potential risks arising from an extremely high rate of home ownership in Singapore, followed by frank insights into various local property segments. The book also includes illuminating coverage on some regional markets which he recommends investors to look into. Backed by solid research and astute observations, Weathering A Property Market Downturn is a sobering read that portends a scenario where massive supply overhangs will drive prices markedly down. Addressing current issues faced by property investors through a collection of articles previously published in Today, The Business Times and The Edge, he offers qualified and invaluable observations on public and private properties, mixed developments, luxury estates and overseas properties.
In an attempt to manage earnings upward, firm managers commonly deviate from normal business activities (i.e., real earnings management) and misrepresent accruals on financial reports (i.e., accrual ...earnings management). The current study aimed to demonstrate that due to the financial and regulatory uniqueness of lodging real estate investment trusts (REITs), lodging REITs diverge from lodging C-corporations (C-corps) in their earnings management behavior. Specifically, drawing on signaling theory and precautionary motive theory, the current study showed that compared to lodging C-corps, lodging REITs are less likely to engage in accrual earnings management but more actively conduct real earnings management. Furthermore, the deterrent impact of cash holdings on real earnings management using unusually low discretionary expenditures was found to be weaker for lodging REITs than for lodging C-corps. The findings of the current study will enhance stakeholders’ understanding of lodging firms’ earnings management behavior by shedding light on the different business types in the lodging industry.
The study investigates the impact of financial distress (credit spread) and liquidity crises (TED spread) on size, value, profitability, investment and momentum premiums within the US Real Estate ...Investment Trust market. Using daily data from 2001 to 2020, we examine the presence, magnitude and significance of these premiums, along with assessing if these premiums are associated with higher risk. The study then employs Auto-regressive distributed lag and Error Correction Modeling to establish the long/short-run impact of financial distress and liquidity crisis on these premiums during recessionary and non-recessionary phases, including COVID-19. Premiums associated with all five factors are positive and significant. Secondly, in contradiction to the Efficient Market Hypothesis, we find that value and momentum portfolios provide superior returns without exposing investors to higher risk while portfolios based on size, profitability and investment, do tend to expose investors to a higher risk. Thirdly, in contradiction to the risk based explanation of Fama–French/Carhart (2015/1997), we find significant evidence of a fall in profitability and momentum premiums with an uptick in financial distress and liquidity crisis. On the other hand, size, value and investment premiums rise with financial distress/liquidity crisis, only during the recessionary phases. This impact is insignificant during non-recessionary phases.
Purpose
This study aims to present the financial performance of companies and investment areas in the real estate investment trust (REIT) industry.
Design/methodology/approach
A fuzzy model for ...financial performance measurement (FM-FPM) was proposed through the collaboration of fuzzy axiomatic design (FAD) and fuzzy entropy weighting (FEW). For the data, financial ratios were used, and their importance and functional requirements were collected via a questionnaire survey.
Findings
The FM-FPM is a beneficial model to be used for a REIT industry based on the structured procedures of FAD and FEW techniques. It can be suitable to regularly evaluate the performance of REITs and their investment areas in financial means, especially in today’s turbulent business environment. The Turkish market that was considered to show the practical applicability of the FM-FPM demonstrated specifically that diversified real estate was found to rank first, followed by mixed-buildings, warehouses, shopping malls and hotels, respectively.
Research limitations/implications
The FM-FPM can be employed for REIT industries in other countries and adapted to different industries. However, more respondents or a different set of criteria might lead to different outputs.
Practical implications
The FM-FPM may guide REIT managers and investors while making their decisions and controlling the performance of REITs and investment areas.
Social implications
The FM-FPM may encourage low- and middle-income investors to make good use of their savings.
Originality/value
The research is first (1) to offer a FPM model in order to determine investable areas in a REIT industry and (2) to employ multiple criteria decision-making tools in order to measure the financial performance of individual companies and investment areas in a REIT industry.
PDF
