Do Asian real estate companies

Do Asian real estate companies - The current issue and full...

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Do Asian real estate companies add value to investment portfolio? Kim Hiang Liow Department of Real Estate, National University of Singapore, Singapore, and Alastair Adair School of the Built Environment, University of Ulster, Jordanstown, UK Abstract Purpose – The purpose of this paper is to examine the role of Asian real estate companies with regard to their “value-added” performance and portfolio diversiFcation beneFts in Asian mixed-asset portfolios, as well as in international real estate securities portfolios over 1996-2005. Design/methodology/approach – ±irst the risk-return performance for all 13 Asian as well as the US and UK real estate securities markets is compared. ±or each country, next the correlation proFles between real estate, common stock, bonds and cash are assessed. The value-add beneFts of Asian real estate securities in an unconstrained and constrained mixed asset portfolio are then assessed in relation to portfolio return, risk and terminal wealth. ±inally, the paper explores whether there are beneFts derived from international diversiFcation with a universe of Asian real estate securities from the perspectives of the US and UK investors. Findings – It was found that, whilst there is little evidence of diversiFcation beneFts and superior risk-adjusted performance of Asian real estate companies in Asian mixed-asset portfolios, diversiFcation into Asian real estate stocks can provide positive portfolio implications for international investors. Thus investing in Asian real estate securities portfolios rather than investing in Asian mixed-asset portfolios may be seen to be the more effective diversiFcation strategy over this period. Originality/value – The study has provided some interesting and important insights into the dynamics and performance of Asian real estate securities. With an increased emphasis on international property investment and as the regional upturn becomes more evident, Asian real estate companies potentially provide an important real estate investment opportunity for international property fund mangers. Keywords Real estate, DiversiFcation, Asset management, ±inancial analysis Paper type Research paper 1. Introduction With increased signiFcance of Asian real estate companies as real estate investment vehicles for institutional investors to obtain property exposures in Asia (Table I), this research assesses whether the risk-adjusted performance of Asian real estate companies results in added value to Asian mixed investment portfolios, as well as in the USA and UK real estate securities portfolios. Given the signiFcant market share and the highest levels of securitization in Asia-PaciFc markets including Australia, Japan, Hong Kong/China and Singapore, this research on Asian property companies has signiFcant implications for ongoing international real estate investment strategies, particularly for the USA/UK and Asian The current issue and full text archive of this journal is available at www.emeraldinsight.com/1463-578X.htm
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Do Asian real estate companies - The current issue and full...

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