Factors Affecting Foreign Investor Choice in Types of U.S. Real Estate

Ford, Deborah Ann; Fung, Hung‐Gay; Gerlowski, Daniel A.

doi:10.1080/10835547.1998.12090940

Cited by 11 publications

(8 citation statements)

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“…Ross, 2011); non-macro-economic factors (e.g. Ford et al , 1998; Moshirian and Pham, 2000; Lai and Fischer, 2007; He et al , 2011; Fereidouni and Masron, 2013a, b; Mauck and Price, 2015) and both macro-economic and non-macro-economic factors (e.g. Rodríguez and Bustillo, 2010; Lieser and Groh, 2011; Mak et al , 2012; Fuerst et al , 2015; Li and Chen, 2015; Salem and Baum, 2016; Devaney et al , 2017; Poon, 2017).…”

Section: Literature Reviewmentioning

confidence: 99%

“…In one of the initial studies on the determinants of investment, Ford et al (1998) validated the traditional investment wisdom of profit maximization and a risk minimization strategy. While choosing amongst the four property types (apartment, industrial, retail and office) in the US, foreign investors were cautious of the cap rate, transaction activity and current rentals.…”

Section: Literature Reviewmentioning

confidence: 99%

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Determinants of foreign and domestic non-listed real estate fund flows in India

Gupta

Newell

Bajaj³

et al. 2020

JPIF

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PurposeReal estate forms an important part of any economy and the investment in real estate, in turn, is impacted by the macroeconomic environment of that country. The purpose of the present research is to examine macroeconomic determinants of foreign and domestic non-listed real estate fund (NREF) flows and to examine whether they are similar or different for an emerging economy like India.Design/methodology/approachThe long and short-run cointegration between the time-series variables is estimated using the autoregressive distributed lag (ARDL) bounds test and error correction model (ECM) using quarterly data across the 2005–2017 period. ARDL is a suitable method for short time-series data.FindingsThe empirical results indicate that domestic NREF flows are positively and significantly impacted by real GDP and performance of listed real estate stocks (i.e. BSE realty index). Whereas, foreign NREF flows are positively and significantly impacted by the exchange rate, performance of listed real estate stocks and domestic NREF flows.Practical implicationsThe empirical results have significant implications for academicians, policy makers and real estate market practitioners. In the context of these results, some interesting insights are gained that would help in the implementation of the policies aimed toward increasing the fund flows in the real estate sector, which in turn would have a significant trickle-down effect on the Indian economy.Originality/valueThe existing literature looks at macroeconomic and other drivers of foreign investment in international real estate investments. However, there are very few studies on the determinants of domestic real estate investment flows and on determinants of NREFs' investment flows; particularly in emerging markets. The present study, in contrast, evaluates simultaneously the macroeconomic determinants of the domestic and foreign NREFs' investment flows in India. The ARDL and ECM method used has been applied for the first time to the study of NREFs.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Determinants of foreign and domestic non-listed real estate fund flows in India

Gupta

Newell

Bajaj³

et al. 2020

JPIF

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“…Regarding institutional barriers, Lieser and Groh (2011) and Salem and Baum (2016) demonstrated that political stability is a determinant of foreign direct real estate investment. Regarding the micro variables, profitability, rents, gross operating profit, historical return, lower financing costs, higher levels of transparency in the real estate market, rapid urbanization, market liquidity and compelling demographics have been proven to impact cross-border real estate capital flows (Fereidouni and Masron, 2013; Ford et al , 1998; Fuerst et al , 2015; Lieser and Groh, 2014; Newell and Seabrook, 2005).…”

Section: Literature Reviewmentioning

confidence: 99%

International capital movement towards the Spanish real estate sector

Taltavull

2020

JPIF

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Purpose The purpose of this paper is to examine the determinants that affect international capital flows (ICF) toward the Spanish real estate market over the period 1995 first quarter to 2017 fourth quarter. Design/methodology/approach VECM methodology is used to analyze time series and panel methods using pooled EGLS regression. Findings VECM parameter results for construction and real estate activities sectors, quickly suggesting a stable performance of capital flows toward Spanish real estate sector that the short-term fluctuation of foreign investment results contributes to the long-term equilibrium relatively soon. By applying the Monetary theory of Johnson, the model identifies a relevant role of M3 explaining capital flows to real estate, together with the lagged variables of construction and real estate activities capital flows, Spanish real interest rate and Spain’s economic growth rate; they are the significant determinants on capital movement to Spanish real estate sector. Interestingly, Spanish housing prices as an exogenous variable, directly, significantly and negatively affect real estate capital flows in all cases as a way to capture the assets price bubble. Practical implications Findings highlight reasons affecting capital flows to real estate and construction activities to Spanish sectors which allow capital Funds to take into account those drivers in their investment decisions. Originality/value This paper is the first attempt to analyze the determinants of ICF to Spanish real estate market; it has a significant meaning for both Spanish economy and international investors.

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“…portfolio theory; and . demand theory (He et al, 2009;Moshirian and Pham, 2000;Holsapple et al, 2006;Ford et al, 1998;Jiang et al, 1998;Rodríguez and Bustillo, 2010;Zhu et al, 2006).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…For example, Ford et al (1998) and Holsapple et al (2006) argued that FREI is often hybrids that have characteristics of both foreign portfolio investment and FDI. Similarly, Jiang et al (1998) discussed that while most foreign investment in real estate is classified as direct investment however it shares most of the characteristics of portfolio investment.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Real estate market factors and foreign real estate investment

Fereidouni

Masron

2013

Journal of Economic Studies

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Purpose -The purpose of this paper is to examine the effects of real estate market factors on foreign real estate investment (FREI). Design/methodology/approach -Applying panel data technique, this paper uses related observations from 31 countries (inclusive of developed countries and emerging market economies) between 2000 and 2008 to investigate the relationships between real estate market factors and FREI. Findings -Controlling for market size, infrastructure and political stability, the results for all countries indicate that lower financing costs and higher levels of transparency in real estate market attract greater amounts of FREI. Moreover, the paper finds that foreign real estate investors favor countries with higher property prices. Interestingly, when the paper splits the sample in developed countries and emerging market economies the paper finds that there are some differences in results in terms of determinants of FREI. Originality/value -While FREI is a large component of service FDI, currently there are no analyses of FREI determinants across a broad set of countries over time. Therefore, the present study has filled this gap.

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Factors Affecting Foreign Investor Choice in Types of U.S. Real Estate

Cited by 11 publications

References 1 publication

Determinants of foreign and domestic non-listed real estate fund flows in India

Determinants of foreign and domestic non-listed real estate fund flows in India

International capital movement towards the Spanish real estate sector

Real estate market factors and foreign real estate investment

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