Currency Risk Management Practices by Australian Listed Property Trusts

Newell, Graeme; MacIntosh, Ian

doi:10.1080/14445921.2007.11104231

Cited by 6 publications

(4 citation statements)

References 13 publications

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“…Currently, LPTs account for approximately 7 per cent of institutional asset allocations and account for over 45 per cent of all institutional‐grade property in Australia. This sees LPTs significantly contributing to Australia being one of the most securitised property markets in the world (Newell, 2006; Newell and McIntosh, 2007).…”

Section: Significance Of Environmentally Sustainable Commercial Property In Australiamentioning

confidence: 99%

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The strategic significance of environmental sustainability by Australian‐listed property trusts

Newell

2008

Journal of Property Investment &Amp; Finance

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PurposeEnvironmental sustainability has taken on increased importance in recent years with property companies. The purpose of this paper is to assess the strategies used by listed property trusts (LPTs) in Australia in delivering excellence and international best practice in environmental sustainability for commercial property.Design/methodology/approachUsing content analysis, the annual reports, corporate responsibility and sustainability reports, and carbon disclosure reports for all LPTs in Australia are assessed. These public domain documents are used to identify the corporate strategies used by LPTs for implementing international best practice in environmental sustainability for the LPT commercial property portfolios.FindingsThe paper finds that Australian LPTs are seen to be strategically implementing a wide range of procedures regarding environmental sustainability. These contributions represent international best practice in environmental sustainability procedures, and include strategies at the corporate, portfolio and individual commercial property levels. These results confirm the strong leadership role of Australian LPTs in implementing international best practice in environmental sustainability in commercial property.Originality/valuePrevious research into sustainable commercial property has largely focused on the valuation implications with sustainability and the various sustainability rating tools. This paper rigorously assesses the strategic issues concerning implementing international best practice in environmentally sustainable commercial property; particularly highlighting the strong leadership role of LPTs in Australia in implementing these international best practices. Given the increasing significance of environmental sustainability and commercial property, this research enables more informed and practical investment decision making by property companies regarding the implementation of environmental sustainability procedures for their commercial property portfolios which are seen to be international best practice.

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Section: Significance Of Environmentally Sustainable Commercial Property In Australiamentioning

confidence: 99%

“…The global credit crisis in 2007‐2008 has seen reduced performance by LPTs in Australia. Further details regarding the strategic development and recent trends in LPTs can be obtained from Newell (2006), Newell and McIntosh (2007) and Newell and Peng (2006).…”

Section: Significance Of Environmentally Sustainable Commercial Property In Australiamentioning

confidence: 99%

The strategic significance of environmental sustainability by Australian‐listed property trusts

Newell

2008

Journal of Property Investment &Amp; Finance

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“…Peng and Newell (2007) and later Newell and Peng (2008) also find that infrastructure funds performed strongly during 1995 to 2006 and provided useful diversification benefits. Since many A-REITs hold significant levels of international property in their portfolios, Newell and MacIntosh (2007) identify the variety of risk management strategies adopted by the A-REITs in managing their capital and income. The A-REIT sector was generally viewed as well managed, owning large, conservative, highly rated investment grade properties which were considered to have reliable and stable tenants and sound cash flows.…”

Section: Introductionmentioning

confidence: 99%

The Global Financial Crisis and the Centro Properties Group Earnings Revision and Refinancing Announcements: An Event Study

Dimovski

2009

Pacific Rim Property Research Journal

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“…A considerable amount of literature has been published on the performance of A-REITs before and during the GFC. Newell and Peng (2009) provided a comprehensive summary of previous A-REIT studies listing the topics such as: performance analysis of the A-REITs (Lee et al, 2007(Lee et al, , 2008Newell, 2006;Newell and Peng, 2006;Tan, 2003, 2004;Peng, 2004;Tan, 2004a, b;Ratcliffe and Dimovski, 2007;Dimovski, 2011), A-REIT initial public offerings (IPOs) (Chikolwa, 2007(Chikolwa, , 2008Brooks, 2006a, b, 2007;Dimovski, 2010), interest rate risk (Newell and Tan, 2005;Newell, 2006;Ratcliffe and Dimovski, 2007;Newell and Peng, 2009), systematic risk (β) (Dimovski, 2009;Morri and Romito, 2017), risk management strategies (Tan, 2004c, d;Newell and MacIntosh, 2007;Newell and Peng, 2008) and environmental sustainability policies (Newell, 2008).…”

Section: Australian Reitsmentioning

confidence: 99%

Explaining the premium to NAV in publicly traded Australian REITs, 2008–2018

Erol¹,

Tyvimaa²

2019

JPIF

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Purpose The purpose of this paper is to explore the levels and determinants of net asset value (NAV) premiums/discounts for publicly traded Australian Real Estate Investment Trust (A-REIT) market during the last decade. A-REITs were severely affected by the global financial crisis as S&P/ASX 200 A-REIT index-listed property stocks experienced 47 per cent discount to NAV, on average, in 2008–2009 crisis. Since 2013, A-REIT sector has exhibited a strong recovery from the financial crisis and traded at high premiums to date. Understanding the relationship between pricing in the public and private real estate markets has taken on great importance as A-REITs continue to trade at significant premium to NAV unlike their counterparts in the USA and Europe. Design/methodology/approach This paper follows a rational approach to explain variations in NAV premiums and explores the company-specific factors such as liquidity, financial leverage, size, stock price volatility and portfolio diversification behind the A-REIT NAV premiums/discounts. The study specifies and estimates a model of cross-sectional and time variation in premiums/discounts to NAV using semi-annual data for a sample of 40 A-REITs over the 2008–2018 period. Findings The results reveal that A-REIT premiums to NAV can be explained not only by the liquidity benefit of listed property stocks but also positive financial leverage effect. During the past decade, A-REITs have followed an aggressive approach in financing their growth by using borrowed funds to purchase assets as the income from the property offsets the cost of borrowing and the risk that accompanies it. Debt-to-equity ratio has to be considered as an important source of NAV premiums as highly geared A-REITs that favoured debt financing over equity financing traded at significant premiums to NAV of their underlying real estate assets. Practical implications The paper includes implications for the REIT market investors. The regression analysis shows that specialty A-REITs with a focus on creative market niches traded at higher premiums compared with other property stocks, especially in the post-GFC recovery period. Specialty REITs are more highly valued by the market than their traditional specialised counterparts (e.g. office and retail REITs), and those pursuing a diversified strategy. Originality/value This paper presents an Australian case study as the A-REIT market provides a suitable environment for testing the effect of financial gearing on the REIT premium to NAV. The study provides empirical evidence supporting the importance of debt-to-equity ratio in explaining the variation in A-REIT NAV premiums.

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Currency Risk Management Practices by Australian Listed Property Trusts

Abstract: ABSTRACT

Cited by 6 publications

References 13 publications

The strategic significance of environmental sustainability by Australian‐listed property trusts

The strategic significance of environmental sustainability by Australian‐listed property trusts

The Global Financial Crisis and the Centro Properties Group Earnings Revision and Refinancing Announcements: An Event Study

Explaining the premium to NAV in publicly traded Australian REITs, 2008–2018

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