Determinants of foreign direct real estate investment in selected MENA countries

2016 ◽  
Vol 34 (2) ◽  
pp. 116-142 ◽  
Author(s):  
Mohamed Salem ◽  
Andrew Baum
Keyword(s):  
Real Estate ◽  
Emerging Market ◽  
Empirical Work ◽  
Tobit Model ◽  
Commercial Real Estate ◽  
Econometric Analysis ◽  
Content Type ◽  
Mena Countries ◽  
Real Estate Sector ◽  
Real Estate Investments

Purpose – The purpose of this paper is to identify the main determinants of foreign direct real estate investments (foreign direct investment (FDI)) in selected Middle Eastern and North African (MENA) countries. Design/methodology/approach – The empirical work of this study is an econometric analysis of FDI in the commercial real estate sector for eight MENA markets, namely Algeria, Egypt, Morocco, Qatar, Saudi Arabia, Turkey, Tunisia and the UAE during the period 2003-2009. The econometric analysis is carried out using the pooled Tobit model technique for panel data. Findings – The paper finds that both country-specific factors and real estate sector-specific variables consistently support hypotheses explaining commercial real estate-related FDI, and find evidence that political stability explains why some selected MENA countries attract more real estate investments than other MENA countries. Practical implications – The findings should be seriously considered in any policy making effort on the part of governments in the region. Originality/value – The authors contribute to the existing literature in many ways. First, the study aims to develop econometric models, using both conventional and unique variables, to be generalised and applied to any developed or emerging market. The study applies relevant techniques in estimating the models, including the pooled Tobit model. Second, the research studies eight selected MENA real estate markets from 2003 to 2009, a timeframe and geography not examined in previous published empirical work on commercial real estate investments. Lastly, and for the first time in real estate literature, the study applies the location dimension of Dunning’s OLI paradigm as a theoretical explanation for the behaviour of foreign investors in commercial real estate towards the selected MENA markets.

scholarly journals Crowdfunding REITs: a new asset class for the real estate industry?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lucia Gibilaro ◽  
Gianluca Mattarocci
Keyword(s):  
Real Estate ◽  
The United States ◽  
Individual Investors ◽  
Diversification Strategy ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Sector ◽  
Real Estate Investments ◽  
Asset Class

PurposeThe paper aims to study the performance of crowdfunding REITs with respect to traditional REITs in order to evaluate the differences in the risk–return profile and their usefulness for a diversification strategy within the indirect real estate investments.Design/methodology/approachThe paper considers the crowdfunding REITs introduced after the JOBS act in the United States and evaluates their performance and risk during the time period 2016–2018. Performance achieved by crowdfunding REITs is compared with other types of REITs in order to evaluate their usefulness for constructing an optimal portfolio strategy based on a standard mean variance approach.FindingsResults show that the performance of crowdfunding REITs is more stable over time with respect to other REITs and the lack of correlation with traditional REITs may be exploited for constructing a more efficient diversified portfolio of indirect real estate investments.Practical implicationsCrowdfunding REITs have different performance with respect to standard REITs and, especially individual investors, may benefit from including this new investment opportunity in their portfolio.Originality/valueThe paper is the first study on the performance of the crowdfunding REITs that is evaluating their usefulness for a diversification strategy within the real estate sector.

scholarly journals Information for decision-making in in-house and outsourced real estate management organisations

Facilities ◽  
2016 ◽  
Vol 34 (13/14) ◽  
pp. 891-905 ◽  
Author(s):  
Peter Palm
Keyword(s):  
Real Estate ◽  
Decision Maker ◽  
Commercial Real Estate ◽  
Decision Makers ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Sector ◽  
Estate Management ◽  
Real Estate Management

Purpose The purpose of this paper is to examine how the real estate owner (decision maker) insures being able to make informed decisions and how they differ according to organisational form. Design/methodology/approach This research is based on an interview study of nineteen firm representatives, six decision makers and thirteen management representatives, all from Swedish commercial real estate sector. Findings The study concludes that, regardless of organisational setting, the industry has a plan regarding handling information. The decision makers have all secured themselves access to the required/desired information. How this is done and what kind of information it is however differ, if the real estate management is in-house or outsourced. Furthermore, a clear focus on financial and contractual information is evident in both organisational settings. Research limitations/implications The research in this paper is limited to Swedish commercial real estate sector. Practical implications The insight the paper provides regarding required information can shed light on how information systems are built and how to improve your information sharing. Originality/value It provides an insight regarding how the industry, depending on organisation setting, prioritises different information and how the decision maker secures access to it.

scholarly journals Measuring customer satisfaction: a study of the Swedish real estate industry

2016 ◽  
Vol 34 (4) ◽  
pp. 316-331 ◽  
Author(s):  
Peter Palm
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Commercial Real Estate ◽  
Signal Quality ◽  
Organisational Development ◽  
Real Estate Industry ◽  
Content Type ◽  
Real Estate Sector ◽  
Customer Evaluations ◽  
Practical Implications

Purpose – The purpose of this paper is to identify the strategies of formal customer evaluations and the use of satisfied customer index in the Swedish commercial real estate industry. Design/methodology/approach – This research is based on an inventory of 24 commercial real estate companies use of formal customer evaluations and an analysis of 15 interviews with top-level managers in the Swedish commercial real estate sector. Findings – Only half of the companies included in the study conduct formal evaluations, although they are considered to work customer oriented. Two different strategies for using formal evaluations is, for improvement work and for signalling quality. One proposed explanation to why only half of the companies conduct formal evaluations is the possibility that the official Swedish Real Estate Barometer is not sufficient if the company would like to use the result for organisational development. There are instead indications that this barometer mainly is used in publicity and marketing purpose, to signal quality. Research limitations/implications – The research in this paper is limited to Swedish commercial real estate sector. But, the overall strategies for conducting formal evaluations should be applicable in general. Practical implications – The insight the paper provides regarding how the industry perceive the Swedish Real Estate Barometer gives direct implications of improvements of the barometer. Originality/value – It provides an insight regarding the use of formal customer evaluations and a proposition of how the Swedish Real Estate Barometer could be changed to better support and fulfil the aim of being a barometer for benchmarking.

It's about time

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Larry Wofford
Keyword(s):  
Real Estate ◽  
Empirical Work ◽  
Commercial Real Estate ◽  
Time Change ◽  
Critical Element ◽  
Infinite Games ◽  
Teaching And Research ◽  
Content Type ◽  
Practice Teaching ◽  
Many Sources

PurposeTime is a critical element of commercial real estate (CRE) and has received only cursory attention. This paper identifies and describes the interactions between time, change and CRE. It leads to important implications and possible changes in professional practice, teaching and research.Design/methodology/approachThe research design involves identifying and synthesising research in a disparate discipline into a coherent portrayal of time, change and CRE. Using the CRE environment as a foundation, a more comprehensive, multi-disciplinary approach is developed to highlight the temporal issues within CRE.FindingsThe extreme levels of complexity, dynamism and uncertainty characterising current CRE environments affect the interaction of time, change and CRE. In response, CRE has become increasingly specialised in property types and time segments. The paper identifies four issues for CRE: the role of CRE as an integrator of different layers of civilisation with different clock speeds, the need for a temporal mindset recognising finite and infinite games, the need for temporal ambidexterity and the use of strategic foresight and scenarios. The very definition of CRE as an industry is questioned.Research limitations/implicationsNeed for essential empirical work as well as additional work for implications.Practical implicationsCRE faces disruption from many sources, and this paper considers how to incorporate time and change into analysis of the CRE market environment. It identifies specific ways CRE can understand and avoid disruption. Further, areas of teaching and research are highlighted.Social implicationsReal estate assets are substantial, long-lived assets with important consequences for society. This paper advances the analysis of such assets.Originality/valueAreas of concentration in CRE and academia needing attention are identified. The areas have generally not been considered prior to this paper.

Cognitive bias, intuitive attributes and investment decision quality in commercial real estate in Uganda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moses Munyami Kinatta ◽  
Twaha Kigongo Kaawaase ◽  
John C. Munene ◽  
Isaac Nkote ◽  
Stephen Korutaro Nkundabanyanga
Keyword(s):  
Real Estate ◽  
Loss Aversion ◽  
Cognitive Bias ◽  
Investment Decision ◽  
Commercial Real Estate ◽  
Decision Quality ◽  
Content Type ◽  
Real Estate Sector ◽  
Confidence Degree ◽  
The Relationship

PurposeThis study examines the relationship between investor cognitive bias, investor intuitive attributes and investment decision quality in commercial real estate in Uganda.Design/methodology/approachA cross-sectional research survey was used in this study, and data were collected from 200 investors of commercial real estate in Uganda using a structured questionnaire. Hierarchical regression analysis was used to test the hypotheses derived under this study.FindingsThe results indicate that investor cognitive bias and investor intuitive attributes are positive and significant determinants of investment decision quality in commercial real estate. In addition, the two components of Investor cognitive bias (framing variation and cognitive heuristics) are positive and significant determinants of investment decision quality, whereas mental accounting is a negative and significant determinant of investment decision quality. For investor intuitive attributes, confidence degree and loss aversion are positive and significant determinants of investment decision quality, whereas herding behavior is a negative and significant determinant of investment decision quality in commercial real estate in Uganda.Practical implicationsFor practitioners in commercial real estate sector should emphasize independent evaluation of investment opportunities (framing variation), simplify information regarding investments (Cognitive heuristics), believe in own abilities (Confidence degree), be risk averse (loss aversion) and avoid making decisions based on subjective visual mind (mental accounting) and group think/herding in order to make quality investment decisions. For policymakers, the study has illuminated factors such as provision of reliable information that ought to be taken into account when promulgating policies for regulation of the commercial real estate sector. This will help investors to come up with investment decisions which are plausible.Originality/valueFew studies have focused on investor cognitive bias and investor intuitive attributes on investment decision quality in commercial real estate. This study is the first to examine the relationship, especially in the commercial real estate sector in a developing country like Uganda.

scholarly journals Incentives in Swedish commercial real estate companies: the property manager function

2017 ◽  
Vol 35 (2) ◽  
pp. 150-164 ◽  
Author(s):  
Peter Palm
Keyword(s):  
Real Estate ◽  
Effective Property ◽  
Commercial Real Estate ◽  
Property Management ◽  
Real Estate Industry ◽  
Content Type ◽  
Management Level ◽  
Real Estate Sector ◽  
Work Tasks ◽  
Management Organisation

Purpose The purpose of this paper is to identify factors on the property management level for analysing incentives for an effective property management with a focus on organising it in-house. Design/methodology/approach This research is based on an interview study of 11 firm representatives from the Swedish commercial real estate sector with in-house property management. Findings The study concludes that the property management organisation in the in-house setting is governed in an informal way, with a large portion of “freedom with responsibilities” setup instead of regulations. Research limitations/implications The research in this paper is limited to the Swedish commercial real estate sector. Practical implications The insights into the paper regarding how decision makers create incentives for the property management organisation can provide inspiration to design incentives for effort. Originality/value It provides an insight regarding how the commercial real estate industry prioritises different work tasks and how incentives are created to enable effort.

scholarly journals Real estate management: incentives for effort

Facilities ◽  
2017 ◽  
Vol 35 (9/10) ◽  
pp. 573-587
Author(s):  
Peter Palm
Keyword(s):  
Real Estate ◽  
Commercial Real Estate ◽  
Decision Makers ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Sector ◽  
Work Tasks ◽  
Estate Management ◽  
Real Estate Management

Purpose The aim of this paper is to examine how the real estate owner (decision maker) can ensure that the preferred tasks are prioritised. In particular, the incentives to ensure motivation to perform to accomplish the strategic goals of the decision maker are investigated. Design/methodology/approach This research is based on an interview study of 19 firm representatives, 6 decision makers and 13 management representatives, all from the Swedish commercial real estate sector. Findings The study concludes that the real estate management organisation in the outsourced management setting is governed by the contract, in detail constituting work tasks, and in the in-house management setting, there is freedom with responsibilities instead of regulations. Research limitations/implications The research in this paper is limited to Swedish commercial real estate sector. Practical implications The insight in the paper regarding how decision makers create incentives for the real estate management organisation in the different organisational settings can provide inspiration to design incentives for effort. Originality/value It provides an insight regarding how the industry, depending on organisation setting, prioritise different work tasks and how incentives are created to enable effort.

Greenness and financial performance of European REITs

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Giacomo Morri ◽  
Rachele Anconetani ◽  
Luca Benfari
Keyword(s):  
Real Estate ◽  
Positive Relationship ◽  
Operating Performance ◽  
Ordinary Least Squares ◽  
Commercial Real Estate ◽  
Content Type ◽  
Return On Equity ◽  
Real Estate Sector ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the link between greenness and the operating performance in 50 listed European real estate investment trusts (REITs). Design/methodology/approach Using a sample of 50 listed European REITs, the analysis leverages on Ordinary least squares models to investigate the relationship between greenness and operating performance indicators. In particular, it examines three types of greenness indicators: the overall Green Real Estate Sustainability Benchmark (GRESB) rating, its two components (management and policy [MP] and implementation and measurement) and the seven aspect scores; return on equity (ROE) and return on assets (ROA) are the fundamental measures of REITs operating performance. Findings The results demonstrate a positive relationship between greenness indicators and operating performance in European REITs, but the impact on ROE and ROA differs depending on the GRESB variable analyzed. If the GRESB rating proved to be significant on ROE and ROA, none of its two components has an impact on ROA, and only the MP score has a positive relationship with ROE. Finally, of the seven aspect scores, only the stakeholder engagement is significant on the two dependent variables. Originality/value The commercial real estate sector has a significant role in tackling climate change issues. To incentivize the market to increase the investments in green buildings, it is essential to find a link between their sustainability characteristics and the improvements they deliver in terms of operating performance. Despite there being a substantial body of literature investigating this connection in the US REITs market, there is still limited knowledge on the relationship between green and operating indicators in the European REITs market.

Understanding real estate investments through big data goggles

2019 ◽  
Vol 12 (4) ◽  
pp. 661-686 ◽  
Author(s):  
Marcelo Cajias
Keyword(s):  
Big Data ◽  
Real Estate ◽  
Methodological Approach ◽  
Investment Strategy ◽  
Commercial Real Estate ◽  
Hedonic Models ◽  
Bond Yields ◽  
Content Type ◽  
Real Estate Investments ◽  
Implicit Prices

Purpose This paper aims to develop a conceptual understanding and a methodological approach for calculating residential net initial yields for both a buy-to-hold and rental investment strategy from hedonic models. Design/methodology/approach The markets modelled comprehend of dwellings for rent and sell in Germany. For each of them, two regression models are estimated to extract implicit prices and rents for an artificial identical dwelling and estimate the willingness to pay for the same asset from both a buy-to-hold and rental investment strategy. Findings The 3,381 estimated net initial yields in the 161 German markets showed a spatial pattern with the biggest and most attractive cities showing the lowest yields and a self-adjusting process in the markets surrounding the top cities. The net initial yields over time show that prices have increased stronger than rents, leading to rock bottom yields for residential assets and a significant premium in comparison to government bond yields. The approach responds to the spatial hierarchy of markets in Germany, meaning that the level of the estimated yields is accurate and achievable from an investment perspective. Practical implications The investment case in residential markets is certainly unique as net initial yields are scarce, especially due to the relatively low number of investment comparables. The paper sheds light on this problem from a conceptual and methodological perspective and confirms that investment yields are deducible by making usage of hedonic models and big data. Originality/value In the era of digitalization and big data, residential assets are mostly brought to the market via digital multiple listing systems. Transparency is an essential barrier when assessing the pricing conditions of markets and deriving investment decisions. Although international brokers do provide detailed investment comparables on – mostly commercial – real estate markets, the residential sector remains a puzzle when it comes to investment yields. The paper sheds light on this problem.

scholarly journals Performance of Foreign Direct Investment in Commercial Real Estate in Nigeria from 2006-2017

2021 ◽  
Vol 04 (07) ◽  
Author(s):  
Nkiruka Evangeline Obi-Aso ◽  
Keyword(s):  
Real Estate ◽  
Performance Indicator ◽  
International Perspective ◽  
Commercial Real Estate ◽  
Foreign Direct Investments ◽  
Real Estate Sector ◽  
Ex Post ◽  
Capital Growth ◽  
Real Estate Investments ◽  
Ex Post Facto

Performance of FDI in commercial real estate in Nigeria when compared to international benchmark figures is yet to be established and documented in literature. The aim of the study was to appraise the performance of FDI in commercial real estate in Nigeria from 2006 to 2017 in a bid to empirically assist foreign direct investors’ decisions on investing in the Nigerian commercial real estate sector. The objectives were to; ascertain and compare returns from foreign direct investments in commercial real estate in Nigeria with international benchmark; and to examine how FDI tax responsibilities in Nigeria compare with the global benchmark rate. The study adopted ex post facto research design, and the unit of analysis was selected foreign controlled commercial real estate investments in Lagos and Abuja. The study adopted the Jones Lang LaSalle benchmark settings for commercial real estate performance indicator due to its empiricism from an international perspective where yield is 5.7%, capital growth is 7% and rental growth is 5.5%. Data were collected on rental values, capital values, tax responsibilities, and was analyzed using T-test. The study showed a yield of 4%, (t = 6.364; p < 0.05) and a capital growth rate of 21%, (t = 1.592; p > 0.05), while there was no negative variation in FDI tax responsibilities in Nigeria and international benchmark rate cap of 30% (t = .8666; p > 0.05). The study recommended that property managers should practice tenant mix and flexible leases and spaces.

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