Long-Term Benefits from Investing in International Real Estate

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp09023.pdf France and the Netherlands in the EMU. Therefore it is implied, from an investor's point of view, that it should be sufficient to focus only on these central markets. With respect to the efficient market hypothesis, the findings by cointegration analysis put some further doubt on its validity for securitized real estate markets. Non-technical Summary

Downside risk optimization in securitized real estate markets

“…In general, all indices considered are characterized by statistically significant excess kurtosis and negative skewness with the exception of the Asian markets. However, the hypothesis of normally distributed returns is rejected for all markets at the 1 percent level of significance, which is in line with findings by Schindler (2010).…”

Relationship between Foreign Macroeconomic Conditions and Asian-Pacific Public Real Estate Markets: The Relative Influence of the US and China

“…3 As highlighted in Footnote 1, this study is concerned with public real estate (securitized real estate), which is part of the stock market and an important asset component in many national economies. As documented in many real estate studies (Fung et al 2006;Schindler 2011;Ling and Naranjo 2002), since direct (physical) real estate usually respond more slowly to economic stimuli than other financial markets (usually up to three-month lags), it is adequate to assume traded (or public) real estate responds faster, only between one-and two-month delays.…”

“…Another development that happened within the region is that the growing strong linkages between international stock markets and between international bond markets over the past decade prompted investors to search for different opportunities to diversify their portfolios. In this context, real estate investments have emerged to show low correlation with stocks and bonds, and therefore, have appropriate characteristics contributing to portfolio optimization (Schindler 2011). Moreover, the growing financialization of global real estate markets facilitates the allocation of real estate in large multi-asset portfolios to improve asset allocation over the period.…”

Is International Investment Diversification Prudent to Either the Individual or Corporate Investor?

“…18 MSCI World is a stock market index. It is maintained by MSCI Inc., formerly Morgan Stanley Capital International, and is often used as a common benchmark for 'world' or 'global' stock funds ISSN 2250-3153 www.ijsrp.org Schindler (2009) presented empirical evidence to show that in the real estate business there tend to be a lower correlation between domestic real estate indices and those of foreign markets. From an investor's point of view this is good news, as it means that when one market is performing poorly the other will be bullish.…”