The added-value role of industrial and logistics REITs in the Pacific Rim region

Lin, Yu‐Cheng; Lee, Chyi Lin; Newell, Graeme

doi:10.1108/jpif-09-2019-0129

Cited by 5 publications

(8 citation statements)

References 46 publications

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“…Therefore, the significantly negative sign may indicate that industrial REITs is less affected by random shocks than other assets in the marketplace, which led investors to switch their investments to industrial REITs in the USA and Japan over the study period. This is in line with an addedvalue role of industrial REITs in Pacific Rim mixed-asset portfolios in the post-GFC context, as noted by Lin et al (2020). As expected, the overall equity market had a significant impact upon excess returns of REIT sub-sectors across these four markets, evident by the level and volatility of the overall equity market excess returns being significantly positive in the mean and variance equations in each case.…”

Section: Hypothesessupporting

confidence: 84%

“…An interesting finding is that industrial REITs was immune to interest rate changes in the post-GFC context. This characteristic of industrial REITs may be attributed to the trend of industrial REITs moving from traditional industrial property structures to logistics property formats after the GFC in order to gain strategic exposure to recent e-commerce trends, as documented by Lin et al (2020). The baseline results are generally robust in the post-GFC context.…”

Section: Interest Rate Sensitivity Of Property Sectorsmentioning

confidence: 93%

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Varying interest rate sensitivity of different property sectors: cross-country evidence from REITs

Lin

Lee

Newell

2021

JPIF

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PurposeRecognising that different property sectors have distinct risk-return characteristics, this paper assesses whether changes in the level and volatility of short- and long-term interest rates differentially affected excess returns of sector-specific Real Estate Investment Trusts (REITs) in the Pacific Rim region between July 2006 and December 2018. The strategic property risk management implications for sector-specific REITs are also identified.Design/methodology/approachDaily excess returns between July 2006 and December 2018 are used to analyse the sensitivity in the level and volatility of interest rates for REITs among office, retail, industrial, residential and specialty REITs across the USA, Japan, Australia and Singapore. The generalised autoregressive conditionally heteroskedastic in the mean (GARCH-M) methodology is employed to assess the linkage between interest rates and excess returns of sector-specific REITs.FindingsCompared with diversified REITs, sector-specific REITs were less sensitive to short- and long-term interest rate changes across the USA, Japan, Australia and Singapore between July 2006 and December 2018. Of sector-specific REITs, retail and residential REITs were susceptible to interest rate movements over the full study period. On the other hand, office and specialty REITs were generally less sensitive to changes in the level and volatility of short- and long-term interest rate series across all markets in the Pacific Rim region. However, the interest rate sensitivity of industrial REITs was somewhat mixed. This sector was sensitive to interest rate movements, but no comparable evidence was found since the onset of GFC.Practical implicationsThe insignificant exposure to interest rate risk of sector-specific REITs may imply that they have a stronger interest rate risk aversion and greater hedging benefits than their diversified counterparts, particularly for office and specialty REITs. The results support the existence of REIT specialisation value in the Pacific Rim region from the interest rate risk management perspective. This is particularly valuable to international property investors constructing and managing portfolios with REITs in the region. Property investors are advised to be aware of the disparities in the magnitude and direction of sensitivity to the interest rate level and volatility of REITs across different property sectors and various markets in the Pacific Rim region. This study is expected to enhance property investors' understanding of interest rate risk management for different property types of REITs in local, regional and international investment portfolios.Originality/valueThe study is the first to assess the interest rate sensitivity of REITs across different property sectors and various markets in the Pacific Rim region. More importantly, this is the first paper to offer empirical evidence on the existence of specialisation value in the Pacific Rim REIT markets from the aspect of interest rate sensitivity. This research may enhance property investors' understanding of the varying interest rate sensitivity of different property types of REITs across the USA, Japan, Australia and Singapore.

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Section: Hypothesessupporting

confidence: 84%

Section: Interest Rate Sensitivity Of Property Sectorsmentioning

confidence: 93%

Varying interest rate sensitivity of different property sectors: cross-country evidence from REITs

Lin

Lee

Newell

2021

JPIF

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“…In recent years, the revolution of science and technology has contributed to the continuous establishment of new types of infrastructure covering logistics facilities, data center, self-storage, communication tower and so on. For one thing, the growth of e-commerce promotes the evolution of omnichannel retail platforms and enhances the demand of logistics facilities (Bohjalian, 2018;CBRE, 2018;Knight Frank, 2018;World Bank, 2018;Chong, 2019;Xu et al, 2019;Lin et al, 2020); for another thing, the breakthrough of high tech-digital technologies including big data analytics, artificial intelligence (AI), internet of things (IOT), cloud computing and 5G telecommunications brings about the prosperity of data centers and communication towers (Newell & Peng, 2008;Oyedele, 2014;McIntosh et al, 2017;Marzuki & Newell, 2019).…”

Section: Introductionmentioning

confidence: 99%

The Stock Price Performance and Return Style of the Pan-Infrastructure Reits Corporation: Evidence from U.S. and Japan Market

Li¹

2022

IJEF

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The growth of big data analytics, cloud computing and 5G communication promotes the expansion of Pan-infrastructure REITs market. Despite previous studies confirmed the value-added role of pan-infrastructure REITs in a mixed-asset portfolio at the framework of mean-variance optimization, the anti-recession characteristics and stock-bond mixed feature of pan-infrastructure REITs is still scarcely investigated until now. In this paper, targeting at the U.S. and Japanese pan-infrastructure REITs market, we employ the capital asset price model (CAPM) and Sharpe model to conduct an empirical research to clarify the aforementioned issue, and the corresponding results indicate that in U.S. REITs market, the return style of new-infrastructure REITs corporation whose underlying asset covering data center, communication tower reveals the substantial anti-volatility characteristics under the increasing macroeconomic uncertainty, while the industrial REITs and infrastructure REITs corporation which belongs to the public utility sub-sector has revealed the completely opposite trend that the stock constituents account for a higher percentage of its return style, simultaneously. On the other hand, the results from horizontal comparison also suggest that the pan-infrastructure REITs corporation in Japan has more remarkable defensive characteristics with higher ratio of bond constituents than that in U.S. Such results uncover the impact of sectoral effect and market distinction on the stock price performance and return style of relevant pan-infrastructure REITs corporation in various countries and are also beneficial to the risk control activity of institutional investors.

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“…However, there are many challenges arising for retail companies, especially shopping centers, related to the rapid growth of e-commence [1][2][3]. This sees an increase in logistic properties and a decline in demand for retail properties such as shopping centers [4]. Understandably, the business environment with COVID-19 is changing, so supermarkets will have to offer added value to customers and will change, so sustainability and environmental aspects can become a shopping center exclusivity, thus attracting more customer flows in the future.…”

Section: Introductionmentioning

confidence: 99%

“…He et al (2021) [5] discussed the importance of real-time consumer information in driving sustainable property development and the importance of innovation to encourage sustainable property development, respectively. Newell and Lee (2012) [4] and Pham and Kim (2019) [6] also showed that property investors and construction firms, including shopping centers, are taking an increased dimension of environment, social and governance.…”

Section: Introductionmentioning

confidence: 99%

Assessing Customer Preferences for Shopping Centers: Effects of Functional and Communication Factors

et al. 2021

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Retail companies operating in Lithuania are very important for the national economy. Domestic consumption has remained one of the most important drivers of Lithuania’s economic development. The objective of this article is to investigate the customer preferences and to identify selected factors of shopping centers in Vilnius, Lithuania. The study of Vilnius shopping centers is based on a complex model that integrates the following factors: shopping center goods and services, customer service, image factors, physical factors, situational factors and demographic characteristics of target consumers. Expert interviews aimed to determine the customer preference factors by perception of professional experts in relation to the phenomenon under study. The consumer survey questionnaire focuses on all the identified factors that determine the choice of a shopping center. This article identifies theoretical factors for the selection of retail shopping centers, reviews the market trends and peculiarities of Vilnius shopping centers, evaluates the factors for the selection and assess functional, emotional and communicational consumer preferences for the choice of Vilnius shopping centers.

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The added-value role of industrial and logistics REITs in the Pacific Rim region

Cited by 5 publications

References 46 publications

Varying interest rate sensitivity of different property sectors: cross-country evidence from REITs

Varying interest rate sensitivity of different property sectors: cross-country evidence from REITs

The Stock Price Performance and Return Style of the Pan-Infrastructure Reits Corporation: Evidence from U.S. and Japan Market

Assessing Customer Preferences for Shopping Centers: Effects of Functional and Communication Factors

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