The Significance of Property Sector and Geographic Diversification in Australian Institutional Property Portfolios

Newell, Graeme; Keng, Tan Yen

doi:10.1080/14445921.2003.11104142

Cited by 25 publications

(16 citation statements)

References 12 publications

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“…This evidence of market segmentation suggests that there are diversification benefits from including LPTs in an investment portfolio, particularly in conditions of increased stockmarket volatility (Newell and Acheampong, 2001). Both diversified and sector-specific strategies are equally effective for LPT portfolio diversification (Newell and Tan, 2003), with LPTs also showing evidence of superior property selection and market timing (Peng, 2004). The establishment of an LPT futures market in August 2002 further enhanced the stature of LPTs, with institutions being able to use LPT futures as an effective risk management tool for hedging their LPT exposure (Newell and Tan, 2004).…”

Section: Introductionmentioning

confidence: 98%

Factors Influencing the Performance of Listed Property Trusts

Newell

2005

Pacific Rim Property Research Journal

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Section: Introductionmentioning

confidence: 98%

Factors Influencing the Performance of Listed Property Trusts

Newell

2005

Pacific Rim Property Research Journal

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“…They allow liquidity and transparency to property investment (Newell, ; Dolvin and Pyles, ) not generally available to direct property investment. Additionally, the inclusion of REITs in an investment portfolio can act as a defensive stock (Glascock et al ., ; Newell and Tan, ; Newell, ) due to their lower volatility and diversification benefits (Ratcliffe and Dimovski, ). The Australian REIT sector is recognised as a world leader in securitised property (Higgins and Ng, ) and now comprises an important component of the property market (Parker, ).…”

Section: A‐reit Institutional Backgroundmentioning

confidence: 99%

Long‐Term post‐merger announcement performance. A case study of Australian listed real estate

Ratcliffe

Dimovski

Keneley

2015

Accounting & Finance

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This study examines the long-term postmerger performance of Australian Real Estate Investment Trusts (A-REITs). The A-REIT sector is used as a case study being less vulnerable to agency issues due to its regulatory structure (Eichholtz and Kok, 2008;Ratcliffe et al., 2009). Research on conventional firms has shown, on average, shareholders are worse off in the long run (Alexandridis et al., 2012). In contrast, we find that shareholders experience significantly positive abnormal returns, after accounting for the financial crisis. This outcome suggests that when managers are restricted with the use of retained earnings and the type of investment, they may be less susceptible to hubris and/or agency issues.

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“…The authors found that diversifying investments internationally by sector is a better strategy than other forms of strategies. In a similar vein, Newell and Keng (2003) evaluated the effectiveness of sector versus regional diversification in Australia. Using the Property Council of Australia (PCA) property authors found that both property type and geographic diversification delivered significant diversification benefits [3].…”

Section: Literature Reviewmentioning

confidence: 99%

Dynamic interactions among property types

Yunus

2013

Journal of Property Investment &Amp; Finance

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Purpose -The aim of the study is to utilize cointegration techniques and analyze the degree of linkages among four key property types (retail, office, industrial, and residential) of eight major countries throughout North America and Europe. Additionally, the study evaluates whether investors can attain greater diversification benefits by investing across specific property sectors within their own nations in the long-run. Finally, the study examines whether certain property sectors can be considered the "leader" that drives the remaining sectors over time. Design/methodology/approach -Multivariate cointegration tests developed by Johansen and Johansen and Juselius are utilized to evaluate whether long-run equilibrium relationship(s) exist among the four property sectors. If evidence of cointegration is found, hypothesis tests are implemented to separate out the markets that can be excluded from the cointegrating relationships and to identify the markets that are the sources of the common trends (weakly exogenous), respectively. Findings -Long-run cointegration results indicate that the four property sectors of the USA, Canada, Netherlands, and the UK have fully converged implying limited diversification possibilities. The property sectors of Finland, France, Germany and Sweden, however, have only partially converged. Further analysis reveals that for these four countries, the industrial sectors provide the greatest long-run diversification benefits. Finally, weak exogeneity tests indicate that for an overwhelming majority of the countries under consideration, the residential sectors are the sources of the common stochastic trends, that "lead" the remaining property types towards the long-run equilibrium relationships. Practical implications -The conclusions from this study should be beneficial to investors, portfolio managers, pension fund managers and other institutional investors in the USA and abroad who are contemplating to invest across property sectors within their own countries in making more informed portfolio allocation decisions. The findings also highlight the importance of implementing time-series econometric techniques to accurately and appropriately model interactions among property sectors over time. Originality/value -This is one of the few studies that utilize modern-day timeseries techniques to analyze the dynamic interactions among the property sectors of eight major nations throughout North America and Europe. Prior studies, have been limited to modeling interrelationships between the property sectors of the USA and UK, with little attention given to other major real estate markets.

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The Significance of Property Sector and Geographic Diversification in Australian Institutional Property Portfolios

Abstract: ABSTRACT

Cited by 25 publications

References 12 publications

Factors Influencing the Performance of Listed Property Trusts

Factors Influencing the Performance of Listed Property Trusts

Long‐Term post‐merger announcement performance. A case study of Australian listed real estate

Dynamic interactions among property types

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