PurposeThe aim of this study is to shed light on the relative importance of Chinese (Mainland China and Hong Kong: CH-HK) foreign direct investments (FDIs) in real estate (FDIRE) on the dynamics of Asia-Pacific (APAC) public real estate markets after the Global Financial Crisis.Design/methodology/approachUsing a parsimonious real estate asset-pricing model including macroeconomic risk factors, the authors develop a metric to measure FDIs in the real estate sector. The authors use a panel VAR approach based on robust econometric methodology (generalized method of moments) and deal with potential endogeneity and an eventual causality problem. The authors also compute multiple metrics to measure the Chinese, US and Japanese FDIs in the real estate sector.FindingsThe study results report a positive significant impact of CH-HK FDIRE on APAC public real estate returns, while FDIRE originating from outside China are not significant. The authors also show that Chinese investors use the channel of FDIs in Diversified Listed Property Companies (LPCs) and Hotel and Family LPCs to gain exposure to the APAC real estate markets. The study results suggest that APAC property markets are mainly impacted and emphasize the importance of an intercontinental diversification strategy for investors in LPCs in the APAC region.Practical implicationsContrary to Bond et al. (2003) who identified that APAC public real estate markets were overwhelmingly idiosyncratic in the decade preceding China's WTO membership (1990–2001), the study findings underline that Chinese FDIRE became a common factor affecting all eight markets in this study in the decade following the global financial crisis (2007–2017). The results emphasize the importance of an intercontinental diversification strategy for investors in LPCs in the APAC region.Originality/valueThe authors use a parsimonious model, introduce metrics to measure FDIRE and apply a panel VAR approach based on a robust econometric methodology to shed light on China's economic globalization strategy on Asia-Pacific public real estate markets after the GFC. The study results highlighting the major impact of CH-HK FDIRE on securitized real estate market returns dynamics, identify the existence of an Asian common factor driven by Chinese FDI inflows into neighbouring countries.

Dans cet article nous revisitons le biais domestique (ou home bias) en recourant aux options de croissance. En utilisant une base de données unique en immobilier, nous montrons que les foncières cotées sur les marchés financiers (ou les REITs) qui sont concentrées géographiquement exploitent mieux les options de croissance que celles qui sont non concentrées. Nos résultats empiriques (portant sur le marché américain de 1995 à 2017) montrent que le beta des options de croissance est significativement plus élevé que le beta des actifs en place pour les foncières qui ont un plus haut degré de concentration géographique. Nous constatons également que les options de croissance plutôt que les actifs en place représentent une composante importante dans la valorisation des foncières concentrées géographiquement. Globalement, nous montrons que la distance géographique et l›exploitation des options de croissance, pour les REITs américaines, sont liées et constituent des variables importantes dans l’explication du processus de décision d’investissement.

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Purpose This paper aims to explore the relationship between the financialisation dynamics of listed property companies (LPCs) and their participation in the metropolisation dynamics, in ten European countries between 2000 and 2017. The study takes place in a context of globalised real estate markets and modification of traditional urban economics. Design/methodology/approach The measure of financialisation corresponds to a beta increase, in the sense of the capital asset pricing model, and is corroborated by an informativeness index. LPC-owned properties are classified along two spatial segmentations. Panel models are used to analyse the relation between financial and urban hierarchies (through building arbitrages). Findings Financialisation is generally associated with a decrease in the number of assets owned, especially in the Netherlands and the UK, whereas non-financialised companies tend to increase their number of assets, especially in “flight-to-quality” countries such as Germany and Switzerland. In the first case, non-urban spaces and small and medium urban areas are arbitraged in favour of urban cores and metropoles. In the second, investments are reallocated towards hinterlands and the lower segments of the urban hierarchy. Over the study period, the parallelism between the financial hierarchy and the urban hierarchy was reinforced. Spain illustrates the risks of this evolution, whereas Sweden and Belgium present specificities. Originality/value This paper illustrates how LPCs function as transmitting channels in the new spatial and urban organisation.

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