Impact of Inflation on Indirect Real Estate Investments in Nigeria

Dabara, Daniel Ibrahim; Chiwuzie, Augustina; Omotehinshe, Olusegun Joseph; Soladoye, John Oyekunle

doi:10.15396/eres2019_37

Cited by 4 publications

(7 citation statements)

References 14 publications

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“…This was indicated by a beta Beta coefficient of -0.127 and -0.225 for REITs and non-REITs asset classes respectively. Theseis results suggested a perverse hedging characteristics for all the securitiszed real estate investments in the study area (Dabara et al 2019 Real estate is considered one approach to hedge against inflation, given the asset class usually has little correlation with stocks and bonds, and therefore. So naturally, investor interest is soaring.…”

Section: Studies On Reits and Inflationmentioning

confidence: 86%

“…Findings from a study by Dabara et al 2019 revealed that the return profile of REITs and non-REITs equities in Nigeria from 2007 to 2016 had experienced some level of volatility with the non-REITs outperforming the REITs investment asset (the highest returns obtained from REITs investment was 5.43%, while the highest returns for the non REITsnon-REITs was 41.79%). Inflation was seen to be mostly in double digits and had kept increasing throughout the study period, ranging between 4.37 and 18.45.…”

Section: Studies On Reits and Inflationmentioning

confidence: 99%

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Effects of COVID-19 on the relationship between inflation and REITs returns in South Africa

Mpofu¹,

Moobela

Simbanegavi

2023

JPIF

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PurposeThis research aims to ascertain the extent to which the coronavirus disease 2019 (COVID-19) epidemic affected the relationship between inflation and real estate investment trusts (REITs) returns in South Africa.Design/methodology/approachThis research used the Johansen cointegration test and effective test in establishing if there is a long-run cointegrating equation between the variables. To ascertain if COVID-19 resulted in a different relationship regime between inflation and REITs returns, the sequential Bai–Perron method was used.FindingsBetween December 2013 and July 2022, there was no evidence of a long-run relationship between inflation and REITs returns, and a restricted vector autoregressive (VAR) model with a period lag for each variable best describing the relationship. Using the sequential Bai–Perron method, for one break, the results show February 2020 as a structural break in the relationship. A cointegrating equation is also found for the period before the structural break and another after the break. Interestingly, the relationship is negative before the break and a new positive relationship (regime) is confirmed after the noted break.Practical implicationsThis research helps REITs stakeholders to position themselves in light of any changes to macroeconomic activity within South Africa.Originality/valueThis is one of the first studies to test inflation relationship with REITs returns in South Africa and the effects of COVID-19 thereof. This research helps REITs stakeholders to position themselves in light of any changes to macroeconomic activity within South Africa.

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Section: Studies On Reits and Inflationmentioning

confidence: 86%

Section: Studies On Reits and Inflationmentioning

confidence: 99%

Effects of COVID-19 on the relationship between inflation and REITs returns in South Africa

Mpofu¹,

Moobela

Simbanegavi

2023

JPIF

View full text Add to dashboard Cite

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“…Findings from the study revealed that REITs underperformed during and immediately after the global financial crisis experienced around 2008. Dabara et al (2019) found perverse hedging characteristics associated with investments in N-REITs. Similarly, studies such as Khoipham (2013) examined the investment performance of Asian REITs in a mixed-asset portfolio from 2001 to 2012.…”

Section: Literature Reviewmentioning

confidence: 94%

“…In the real estate sector (specifically REITs), a group of studies have examined the inflation-hedging potentials of REITs. These studies include Kloosterman (2009), Aik (2012) and Dabara et al (2019). Kloosterman (2009) found some hedging effectiveness against unexpected inflation for all REITs and Equity REITs in the US.…”

Section: Literature Reviewmentioning

confidence: 99%

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Structure, Conduct and Performance of REITs in Emerging Markets

Dabara

Ogunba

2020

JARER

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Purpose: This study examines the correlations between the structure, conduct and performance of Real Estate Investment Trusts in Nigeria (N-REITs) with a view to providing information that will enhance and guide real estate investment decisions on N-REITs. Design/Approach: The study population consists of all three REIT companies in Nigeria, namely: Skye Shelter Fund, Union Home REIT and UACN Property Development Company (UPDC) REIT. Secondary data on dividends and share prices of N-REITs; Total Business Revenues (TBR) and Total Individual Expenditure (TIE) on conduct variables were sourced from periodicals of the respective companies covering the period from 2008 to 2016. The data series for the study were analyzed by means of the Kwiatkowski-Phillips-Schimidt-Shin (KPSS) unit root tests, Philip-Perron (PP) unit root tests, Granger Causality tests, and the Ordinary Least Square (OLS) regression. Findings: The study shows a Herfindahl Hischman Index (HHI) that ranged between 41.81% (recorded in 2010) and 100% recorded in 2008. This suggests a high concentration in the N-REITs industry. Similarly, the Granger Causality Test conducted reveals a bi-directional causal relationship between the structure, conduct and performance of N-REITs. Practical Implications: The study provides essential information (on the HHI, return performance and causal relationships) for stakeholders in the real estate sector regarding the influence of structure and conduct on the performance of N-REITs. This information will be valuable for equipping asset managers, insurance companies, pension funds and individual real estate investors in making informed investment decisions. Originality/Value: This study is unique as it is the first to draw a link between the structure, conduct and performance of REITs in an African emerging real estate market; something that has not been considered in previous studies.

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Investment Performance and Integration Analysis of Indirect Real Estate and Other Listed Assets

Ayodele,

Kajimo-Shakantu,

Akinlabi

2022

Redefining the Future of Real Estate in Africa: The 21st Annual AfRES Conference

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Purpose: This study examined the investment performance and level of integra on between indirect real estate and other listed investment assets in the Nigerian property market. This is to determine the assets' performance and the long-run rela onship between the assets thereby establishing the diversifica on benefits of combining these assets in a mixed-asset por olio in an emerging African market.Design/Methodology/Approach: The data collected comprised quarterly returns on the indirect real estate asset and the other listed investments for the period of January 2009 to December 2020. The other listed investment assets were the five major sectorial indexes in the Nigerian Stock Exchange (NSE) market which are NSE Banking, NSE Oil and Gas, NSE Industrial, NSE Insurance and NSE Consumer. The indices of these sectors were obtained from the daily list of the NSE. While the investment performance of the assets was analysed using holding period return, standard devia on, return-risk ra o and correla on analysis, the Augmented Dickey-Fuller (ADF) and Johansson integra on tests were employed in analyzing the level of integra on between the assets.

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Impact of Inflation on Indirect Real Estate Investments in Nigeria

Cited by 4 publications

References 14 publications

Effects of COVID-19 on the relationship between inflation and REITs returns in South Africa

Effects of COVID-19 on the relationship between inflation and REITs returns in South Africa

Structure, Conduct and Performance of REITs in Emerging Markets

Investment Performance and Integration Analysis of Indirect Real Estate and Other Listed Assets

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