Event study methodology in analysing real estate investment trust returns

This study investigates the influence of cash rate changes on the equity A-REIT stock prices in the past decade. The findings indicate that cash rate changes can influence the fluctuation of the equity A-REIT stock prices. Moreover, cash rate changes affect small A-REITs to a greater extent than large A-REITs.

Economic analyses on multinational real estate and construction sectors

Both the construction and real estate sectors have been considered vital productive drivers for the economic development of a nation. Multinational economic analyses on these two sectors over a long period enable a better comprehension of their effects and interrelationships. Based on the recently published Organisation for Economic Co-operation and Development (OECD) input-output database at constant prices, this paper compares the real estate and construction sectors of six countries in terms of their shares in gross national product and gross national income. The push and pull effects of these two sectors onto the whole economy are further determined using forward and backward linkage indicators respectively. In addition, the interactions between themselves are formulated in terms of direct and total input parameters. This research provides a numerical approach to examine the economic influences and sectorial correlation of the real estate and construction sectors.

Exploring intersectoral linkages between real estate and construction

Even though linkages have attracted a lot of research interest, few researchers focus on the intersectoral linkages between two specific sectors. This research therefore proposes an indirect intersectoral linkage measure model to explore linkages between the real estate and construction sectors using the Hypothetical Extraction Method (HEM). Using the OECD input-output tables, the direct, total intersectoral linkages and the proposed indirect intersectoral linkages are explored and tested respectively for seven OECD countries over twenty years. The findings describe that the intersectoral linkages from construction to real estate are larger than those from real estate to construction. The statistical testing results imply that the proposed indirect intersectoral linkage measure method seems to be appropriate to analyse the intersectoral linkage between the construction and real estate sectors.

The structural and behaviourial barriers to sustainable real estate development

Sustainable real estate development appears, on literal translation of both terms, to be an oxymoron - however it is a concept that the real estate profession needs to embrace knowledgably. On one hand it can be argued that real estate development is required for continued economic growth and the adoption of sustainability measures is required to mitigate climate change and global warming. Over the last few years there has been growth in the number of sustainability tools available to designers and operators of buildings. For example, in the US the LEED scheme enables designers to assess the environmental impact of their design and to benchmark the sustainability of the design against industry recognised criteria. LEED follows a similar format to the UK’s Building Research Establishment Environmental Assessment Method (BREEAM) introduced in 1990 and the Australian ‘GreenStar’ introduced in 2004. Even though there are an increasing number of sustainability tools available to designers, it still remains that the degree of uptake of the tools has been sporadic. This paper discusses the barriers to sustainable real estate development. Firstly it identifies the barriers to uptake and secondly it establishes the structural barriers in the market which prevent the wider uptake of tools.

The value of sustainability in real estate : a review from a valuation perspective

Purpose – The purpose of this paper is to synthesise the plethora of research that has been conducted into the relationship between sustainability and market value in real estate, by critically analysing the research and the applicability of sustainability and value research in valuation practice.

Design/methodology/approach – The research on the relationship between sustainability and market value in real estate is examined from the perspective of its usefulness to the valuation profession in providing guidance, information and evidence to be used in valuation practice.

Findings – Existing research conducted into the relationship between sustainability and market value has not provided the valuation profession with evidence which would allow the incorporation of normative theories on the value of sustainability in valuation practice. This review highlights the lack of evidence, and the applicability of current research into sustainability and value to the valuation profession in providing guidance and information in valuing real estate incorporating sustainability.

Practical implications – This paper highlights the limited applicability of research to date in regard to the relationship between sustainability and market value for the valuation profession. The lack of historical evidence, data or information on the quantifiable effects on market value of this new trend (sustainability), leaves the valuation profession uncertain as to the relationship between sustainability and market value. There is a probable risk of valuers interpreting strategic research incorrectly, and making inappropriate adjustments or comparisons because of their lack of knowledge and limited sustainability assessment skills. Although there is an evolving body of knowledge, there is a need for extensive analysis of unbiased, evidence-based research in individual and broader markets to provide guidance, evidence and knowledge of the implications of sustainability in the valuation of real estate.

Originality/value – The examination of research investigating the relationship between sustainability and value from a valuation perspective provides an alternative insight into the applicability of current research in valuation practice. The increasing profile and role of sustainability in the real estate sector needs to be addressed in valuation practice; however, the variety of research to date needs to be interpreted by valuers in the correct context. This paper brings to light the applicability of sustainability and value research for the broader valuation profession, and the potential implications of misuse or misunderstanding of that research.

Real estate employability : differing perceptions of graduates from undergraduate and postgraduate courses

Purpose – Employability is likely to be at the forefront of any degree applicant's mind in England and Wales due to an impending large increase in the cost of tuition. The purpose of this paper is to report the findings of a Centre for Education in the Built Environment-funded project which has investigated real estate graduate competencies and employability. The paper concentrates on significant differences in emphasis by graduates from undergraduate (UG) and postgraduate (PG) courses.

Design/methodology/approach – Following an extensive literature review, 72 competencies have been identified and the Confederation of British Industry classification of knowledge, skills and attributes has been adopted. An online survey of 639 graduates (half UG and half PG) asked respondents to complete five-point Likert attitude scales to rate how their course enabled development of the 72 competencies. Themes developed from the results of the questionnaire study have been explored in greater detail with five real estate education providers and the human resource managers of four large London employers.

Findings – Rather surprisingly, UGs rated their gaining of the vast majority of the competencies more highly than PGs. This finding seems to be at odds with the impression given by the educators and employers, both of whom perceive a preference for the greater maturity and commercial awareness of graduates from PG courses.

Originality/value – Real estate course providers can use the results of this study to ensure that their programmes of study adequately address what is likely to become the crucial factor in the choice of any future programme of study – employability.

Australian real estate management and development companies and women directors

Purpose – There is a large literature advocating the importance of a greater proportion of women directors on boards of publicly listed firms. The purpose of this paper is to examine the numbers and proportions of women directors, including women executive directors, on listed Australian Real Estate Management and Development (REMD) companies to identify how prevalent women directors are on such boards.
Design/methodology/approach – The study examines the numbers and proportions of women directors for 35 REMDs in 2011 and compares this to the broad board composition data on 1,715 Australian Stock Exchange listed entities. Statistically significant findings are evident due to the identified low proportions.
Findings – The study finds that of all the Financials Sub Industry sector groups, REMDs have the lowest proportion of female directors on theirs boards – eight women on each of 35 company boards compared to 159 men on these 35 boards at 2011. Of the eight, there were only two women executive directors on boards compared to 50 men. Statistically, it appears that having women directors on REMD boards is not considered important. Even at December 2014, there are only ten women on seven company boards and only one remaining executive director of an REMD company.
Practical implications – Given that female board representation is positively related to accounting returns and that there is a growing voice for legislation to impose mandatory proportions of women directors on boards around the world, it may be in the interests of REMD boards to consider appointing more women more quickly.
Originality/value – The study is the first to examine the numbers and proportions of women directors amongst REMD companies to identify the paucity of such women directors.