Barriers to Institutional Investment in Rental Housing: A Systematic Review of Market Risks

Housing practitioners and policy experts are advocating for an expansion in rental housing supply in contemporary cities around the world. The objective is to convince institutional investors to include rental housing investment in their investment portfolio to contribute to boosting housing supply. Unfortunately, the rental sector is characterized by numerous uncertainties and challenges, making it unattractive to institutional investors. With the growing attention to institutional investors in various housing market contexts, an understanding of the market risks (also known as barriers), is useful to inform future research and policymaking. Using a systematic literature review methodology, this paper synthesizes the extant literature on the market risks inhibiting institutional investment in rental housing. Findings reveal the following barriers: low profitability, non-progressive rent control policies, unclear target group for rented projects, poor landlord-tenant relations, inadequate property management and unreliable property market information. Among all the barriers identified, low profitability and inadequate property management had great influence on their investment decision. Firstly, institutional investors perceive rental housing investment as less profitable and unattractive in terms of project performance. Secondly, the lack of supporting structures for the property management sector contributes to derailing rental yields. The review also finds that the target group for rental projects are often vague especially for projects under government assistance. The rental sectors in many countries are confronted with numerous problems, some of which greatly inhibit institutional investors from investing in the rental asset. This paper concludes that, although the idea of expanding rental housing supply seems laudable, ignoring these problems may be detrimental to housing markets in the long run. Rental markets in many countries are volatile, and thus not ready to receive institutional investors fully into the sector. An expanded rental sector could be advanced if policy makers take the appropriate steps to resolve the identified challenges. Adequate structural preparations must also be made for large scale rental housing supply.

Duty to Address Climate Change Litigation Risks for Australian Energy Companies—Policy and Governance Issues

The transition from fossil fuels to renewable energy requires cooperation from all, including corporations, shareholders, and institutional investors. The purpose of this paper is to explore climate change litigation risks for Australian energy companies and investors from a policy and governance perspective. Companies are increasingly reporting their climate policies to satisfy their shareholders and investor demands. In addition, the government and judiciary are making laws and decisions to support the Paris Agreement. This paper explores whether company directors can and, in some cases, should be considering the impact of climate change litigation risks on their business, or else risk breaching their obligation to exercise care and diligence under the Corporation Act 2001 (Cth, Australia). The paper concludes that in addition to reducing climate change litigation risks, Australian energy companies and institutional investment bodies that invest in Australian energy companies can make informed climate risk decisions by aligning their investments with the goal of net-zero or reduced emissions.

Towards better informed foreign institutional investment

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Ownership concentration can make foreign institutional investors hesitant about investing in the firm. However, board financial expertise acts as a reassuring presence that counters information asymmetry and enables better informed investment decision-making. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

All grown up? Market maturity and investment in London's purpose-built student accommodation sector

PurposeThe UK's purpose-built student accommodation (PBSA) sector has seen significant institutional investment in recent decades. This paper unpacks contemporary trends and perspectives on the sector. It questions whether PBSA has moved from being an “alternative” to “mainstream” residential asset class, framing the analysis through the lens of market maturity.Design/methodology/approachThe methods triangulate perspectives drawn from literature on the evolution of PBSA as an asset class with illustrations of investment trends across the UK between 2005 and 2020 using data from Real Capital Analytics (RCA), combined with findings from 40 semi-structured interviews with investors and stakeholders in PBSA in the UK London is the focus of the work, whilst other regional cities are integrated for comparison.FindingsThe results demonstrate that London's PBSA market is ahead of trends currently being replicated in regional cities. However, the regions currently offer greater return potential and opportunities for risk taking compared to London, where yields are compressed, and the market is considered lower risk. The concept of maturity remains useful as a framework for evaluating markets, however a more granular analysis of sectors is necessary to further understand asset classes within sectors. PBSA continues to trade at a premium across the UK; it is considered the most mature residential asset class.Practical implicationsThe emergence of PBSA as an asset class continues to play a developing role within the residential sector and UK investment market. Risk, value and local context remain key when integrating PBSA into institutional portfolios, and as the first to consider the UK market from a qualitative research approach, this research provides a snapshot of these influences in 2021.Originality/valueOur approach offers original insight into investment trends across the UK and is the first to focus reflections on the London market specifically. The research highlights the role of PBSA as a vanguard asset class for investors into residential, situating its growth within the framework of market maturity and drawing out market nuances from interviews.

‘Bottoms up’: A case study on integrating public engagement within a university culture

This study tracks the integration of public engagement within the systems, structures and culture of a university in Ireland. Public engagement, as an activity of research institutes, is gaining increased attention from policy and funding sources across Europe. However, little has been heard on the processes and practices which bring public engagement to the fore of conversations and activities in such institutions. In this practice case study, we track the evolution of a community of practice of public engagement in an Irish university over three years, through a bottom-up approach taken by a small group of faculty and staff, and organized through collective leadership to maintain momentum over the time period. With the support of key leadership figures, who provided top-down financial and structural support, we trace the narrative of defining public engagement within the university through stakeholder workshops, recording relevant activities with an institution-wide census, updating university public engagement reporting metrics, and establishing an active community of practice. Four key learnings are identified from this collective narrative: (1) the need for patience in attempting to instigate change within an institution; (2) the importance of establishing a shared understanding; (3) the importance of enacting collective leadership as a community; and (4) the necessity of leadership support with grass-roots activity. Reflection on these learnings suggests that the embedding of public engagement in institutions requires both personal and institutional investment.

Board financial expertise and foreign institutional investment: the moderating role of ownership concentration

Purpose The purpose of this paper is to empirically investigate the impact of board financial expertise on the shareholding of foreign institutional investors in an emerging equity market of China and to explore whether ownership concentration moderates the relationship between board financial expertise and foreign institutional investment. Design/methodology/approach To test the hypothesized relationships, this study uses panel data regression models, i.e. static (fixed effect and random effect) and dynamic (two-step generalized methods of moments) models. Further, to control the possible endogeniety issue, this study uses two instrumental variables, namely, board size and industry average financial expertise of board to proxy board financial expertise. This study covers a period from 2006 to 2015 for 169 listed Chinese firms. Findings The results revealed that foreign institutional investors positively perceived board financial expertise and holds more shareholdings with the increasing level of financial experts at boards of directors. Moreover, ownership concentration positively moderated this relationship. It means that in highly concentrated firms, the board financial expertise conveys a stronger signal to foreign institutional investors that firms can manage financial resources rationally by controlling negative effects of ownership concentration. Further, the robustness model also confirmed the relationship between board financial expertise and foreign institutional shareholdings. Originality/value To the best of authors’ knowledge, this is the first study to investigate board-level financial expertise as a determinant of foreign institutional ownership. Further, no previous study has used ownership concentration as a contextual variable on the relationship between board financial expertise and foreign institutional investment.

A qualitative exploration of young people and prison officers’ experiences of empathy within a young offenders’ institution

Purpose This study aims to explore the ways in which young people and prison staff (Prison Officers) within a youth custodial establishment experience empathy. Previous research tends to view empathy as a stable trait and one which people can develop through individual-centred therapy. There has been little consideration of the impact of relationship factors and context in relation to empathy experience and expression. The current study aims to address this by exploring the role of the custodial context in shaping empathy, including the potential impact of relationships, environmental factors and culture. Design/methodology/approach A qualitative approach was used to enable breadth and depth in the exploration of this area. Individual, semi-structured interviews were carried out with a purposive sample of three young people and three Prison Officers. Data was analysed using inductive thematic analysis informed by the guidelines of Braun and Clarke (2006) and King and Horrocks (2010). Findings Constructed themes included “constructions of empathy”, “recipe for empathy”, “institutional investment”, “the value of empathy” and “doing empathy”. Together, they provide detailed insight into the interplay of personal and wider contextual factors influencing the experience of empathy in a custodial setting. The findings suggest that the way in which young people and staff experience empathy in the custodial environment is unique. The findings suggest that empathy takes place within the context of relationships and is influenced by the nature of those relationships, along with the wider social context within which it occurs. Practical implications The findings of the current study support a move away from understanding empathy as an individual personality trait and instead viewing it as a dynamic experience that is changeable based upon the relationship and the context within which it occurs. The findings suggest that interventions aiming to develop empathy should look beyond the level of the individual and the relationship and focus upon developing environments that are supportive of empathy. Originality/value This study provides unique insights into the subjective experience of empathy in a custodial setting, presenting as one of the first to take a more holistic approach to understand this phenomenon.