Development permits in the region are somehow problematic especially in Zekeriyaköy with the all the permits suspended temporarily. However, relevant authorities lit the signal to overcome the permit problems in the recent future. Most part of the region is preserved forest area with restrictions for development. Only villa type developments are permitted in the region. Infrastructure is poor in the region, with Zekeriyaköy being the most developed part of the region relatively. Although electricity and telecommunications infrastructures are satisfactory, natural gas and water supply infrastructures are insufficient, including Zekeriyaköy. As a result, artesian wells are searched and excavated for projects developed in order to insure sustainable water supply. Demirciköy, Bahçeköy and Rumelifeneri also have electricity and telecommunications problems as well. Newly developed projects have to deal with all those infrastructure problems.
When evaluating REITs it is more important to consider cash flow compared to income. When a building is purchased, owners are allowed to deduct large amounts of depreciation even if the building has increased in value. CRA allows this deduction, but it is not cash outlay. On the income statement, there may be large depreciation deduction that is lowering the net income, but there is no cash outlay for this expense. This is why it is more important to look at the cash flow instead of only the net income. To determine if the cash flow per unit is sustainable, it is good to look broadly at a top down level to see if the income revenue will be larger than the interest payments and distributions. If there is a spread, it gives comfort to investors. In this simple analysis we have look at the income from the loan portfolio and properties less property management and taxes. We then have to consider the debt that is payable to get a sense of how much gross profit spread there is. This analysis does not factor in property appreciation or expenses to run the REIT. The assumption is that to some extent the expenses can be managed and the realestate appreciation on exit is challenging to model.
Rudy Stroink, a Dutch citizen resident in Utrecht, the Netherlands, is an accomplished realestate professional who is active as an advisor to realestate companies, governments, and industry organizations across Europe. Mr. Stroink currently serves as Chairman of the Urban Land Institute in the Netherlands, Chairman of the commission advising the Amsterdam Region on the management of office and business districts, Chairman of the advisory committee of the Amsterdam Economic Board responsible for the financial support of new economic activities in the Amsterdam Region, and Chairman of the committee on innovations in realestate and construction for the Dutch Ministry of Infrastructure and Environment. Mr. Stroink, a trained architect, started his career in realestate in 1986 as a partner at realestate development firm OAS Investors in Irvine, California, where he developed retail centres and office projects in the greater Los Angeles area and in San Francisco. In 1994, Mr. Stroink founded Trammell Crow Netherlands (renamed TCN in 2001) in Utrecht, the Netherlands, with Dallas, Texas based Crow Holdings as a 50% partner, and served as CEO until his retirement in 2010. Crow Holdings is the holding company for the family of Mr. Trammell Crow, who in 1948 had founded Trammell Crow Company, one of the leading realestate development and investment companies in the United States. In 2004, Mr. Stroink acquired Crow Holding’s 50% interest in TCN. Under Mr. Stroink’s leadership, TCN grew to become one of the leading realestate development and investment companies in Europe, with the development of over €1 billion of commercial realestate projects and the accumulation of an investment portfolio of over €500 million of commercial realestate properties. Mr. Stroink remains active in the Dutch community as highly sought-after lecturer, guest speaker, and writer. Mr. Stroink currently serves as a guest lecturer at three Dutch universities, specifically in the areas of sustainablerealestate development and redevelopment of commercial realestate. Mr. Stroink writes columns in newspapers, realestate magazines, and for the Dutch Brokers’ Association. Mr. Stroink is also active on the boards of various cultural organizations in the Netherlands, including the International Film Festival of Rotterdam. Mr. Stroink has a Master’s Degree in Architecture and Urban design from the Polytechnic University of Delft, the Netherlands.
Realestate investing involves the purchase, ownership, management, rental and/or sale of realestate for profit. RealEstate has traditionally outperformed the Wall Street equity market. A Street by street knowledge of the market makes it perfect for small savvy investors. Large institutions lag behind trends. Improvement of realty property as part of a realestateinvestment strategy is generally considered to be a sub-specialty of realestate investing called realestate development. Realestate is an asset form with limited liquidity relative to other investments, it is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent. If these factors are not well understood and managed by the investor, realestate becomes a risky investment. The primary cause of investment failure for realestate is that the investor goes into negative cash flow for a period of time that is not sustainable, often forcing them to resell the property at a loss or go into insolvency. A similar practice known as flipping is another reason for failure as the nature of the investment is often associated with short term profit with less effort.
GOR believes that it is important to invest in attractive properties from a long‐term standpoint—properties that continue to boost investment demand for a certain period after acquisition. To this end, GOR cautiously selects prime properties at prime locations with an eye on three key elements: (1) CLOSER ‐ easily accessible from nearby train stations; (2) NEWER ‐ newly or recently built; and (3) LARGER ‐ large office buildings with extensive office space. GOR also takes into consideration “strong and sustainable competitiveness in the marketplace” from a mid‐ to long‐term perspective.
Sustainable, or “green,” realestate has the potential to offer financial benefits to tenants and landlords, as well as benefits for the environment. But, the pursuit of environmental objectives within an investment strategy is often met with investor skepticism. While it feels good to do good, this typically is not enough for investors; a strategy needs to stand on its own economic merits. In the public equity markets, this type of analysis tends to be a fairly straightforward exercise, but the analysis becomes more complicated in the private realestate markets due to data limitations and market opaqueness. While green properties are easily identifiable through their certifications and designations, less is known about their performance. Making comparisons to non-green assets adds further complexity due to the need to control for a variety of variables like market, location, age and quality in an effort to allow for more of an “apples-to-apples” comparison. Rather than taking a leap of faith to pursue this strategy, investors can supplement their investment decision-making processes by creating a “mosaic” using available qualitative and quantitative information. Utilizing these resources and our own in-house experience, this paper finds that the resulting mosaic provides ample support for sustainable property initiatives.
In 2009, Maastricht University were commissioned by the Universities Superannuation Scheme, APG Asset Management and PGGM Investments to conduct a report into the environmental performance of European property investment and development companies. They reported that out of 688 European companies surveyed, Big Yellow was the leader in the ‘Environmental RealEstate Index’ and was ranked second globally. The index compares property companies’ environmental credentials based on the evidence of environmental management practices and their implementation. The survey results were announced in February 2010 and measured what realestate companies were doing to reduce material risk and to benefit from sustainable business opportunities through environmental key performance indicators. The survey represented 80% of the listed European property market. The Maastricht survey is likely to be repeated every other year and to become an increasingly important part of the property investor’s decision-making process.
(2004), Greenaway, Sousa and Wakelin (2004) and Liu (2008), to mention few, the effect of foreign portfolio investment on economic growth of host countries are ambiguous. On the positive note, Knill (2005) argued that foreign portfolio is associated with an increased ability to issue publicly traded securities for small firms in all nations, while Ferreira and Laux (2009) concluded that the net effect of portfolio flows is strong, especially in the less-developed countries. However, Richards (2005) and Prasad, Rajan and Subramaniam (2007) found a contradictory findings. Richards (2005) who studied six Asian emerging equity markets found that the price impact associated with foreigners’ trading are much larger, suggesting that foreign investors have a larger impact on emerging markets. Mihaljek (2005) also found similar concern among European Union countries such as Cyprus, the Czech Republic, Hungary and Slovakia. These countries have asked for a longer transitional period before they can allow for foreign buyers in their realestate sector due to the expectation that the impact of large-scale realestate purchases by foreign residents on the (hiking) prices and (sharp-dropping) affordability of local housing could be very significant. At the meantime, Prasad et al. (2007) observed that current account balances and growth among non-industrial countries are positively associated, implying that a reduced reliance on foreign capital is associated with higher growth. Among the possible explanations provided by Prasad et al. (2007) is non-industrial countries are sensitive to overvaluation caused by rapid capital inflows.
For firms, such as REITs, with multiple outputs, scale economies can be estimated either in the aggregate or as product-specific components. In a realestate application, Zumpano and Elder (1994) use a multi-product translog cost function to examine scale economies in the realestate brokerage industry. Whereas many multi-product models treat the outputs as additive, Zumpano and Elder consider that the source of scale economies is affected by the composition of the output rather than just the size of the firm. In the case of REITs, because dividends are a flow measure and realestate assets are a stock measure, the considered outputs are not additive and cannot be aggregated to measure for scale economies.
Most REIT research on anomalies has concentrated on the size and turn-of-the-year effects in REIT returns. What is lacking is a more extensive examination of the calendar anomalies as they might apply to REITs. In recent years, studies of realestateinvestment trusts have questioned whether REIT performance is more closely related to stock market performance or to the impact of the underlying realestate assets (Giliberto, 1990; Ibbotson and Siegal, 1984; Titman and Warga, 1986; Chan, Hendershott and Sanders, 1990). In addition, Ambrose, Ancel and Griffiths (1992) examined the existence of segmentation between capital and realestate markets using returns for REITs. They found that both the stock market and REIT portfolios exhibit random walk tendencies. Overall, the literature provides support for both the existence of efficiency in stock markets (including realestateinvestment trusts) and for the existence of size and turn-of- the-year anomalies for realestateinvestment trusts. Previous studies in REITs have examined the possible existence of individual anomalies, rather than using a compre- hensive analysis of seasonality in the market for REIT shares.
In terms of cycle tendencies, neither the curve shapes of the valuation results of the short term analyses (Analysis 1 & Analysis 2) are symmetrical. The cycle tendency that assumed in Scenario 3 is more welcomed in Analysis 1 while the cycle tendency in Scenario 2 is more welcomed in Analysis 2. In the long term analysis (Analysis 3), Scenario 3 is more welcomed as well. Scenario 3 is more welcomed in the analyses which make the investment decision at year 0, because in such analyses, the first two phases are always important to the investor, and Scenario 3 offered an Expansion phase in Quarter 1; in the analysis that has a fixed selling time, the last two phases are more important to the investor, that’s why Scenario 2 is more welcomed in Analysis 2.
Specifically, the proposal would be for all buyers of U.S. real prop- erty to receive either a W-9 or appropriate W-8 from the seller or to withhold. If the buyer withholds, the foreign investor would be eligible to file a return for a refund. The question would be much like FATCA, i.e., how much independent investigation would a buyer of realestate have to engage in? The concern is that even with this regime, the reporting could not reach foreign investors in leveraged blockers or REITs. For example, if one purchases U.S. real property (my house, for example) from a U.S. corporation and it provides me a W-9, is there a requirement that the in- dividual requests to determine if the entity is leveraged and/or has for- eign shareholders? If so, how much can the buyer rely on the certifica- tion, or does the buyer need to make an independent investigation? For banks, this requirement is not onerous and fits with their existing know- your-customer requirements. Additionally, there should be a concern about the ‘‘moms and pops’’ buying their apartment from a non-resident. How will they comply with a FATCA-like regime? Today the only re- quirement is to ask for a FIRPTA certificate. 361
market capitalisation of $568 billion reported by Ernst and Young (2010). Furthermore rapid globalization in the financial markets as a result of the deregulation of the markets fuelled cross-listing of securities (Gagnon and Karolyi, 2011). Proliferation of cross- listings has resulted in intense competition among the major securities markets to attract and retain listings to provide investors with a wider range of investment products. Although research findings are somewhat mixed, there appears to be a general consensus among most researchers that cross-listing enables companies and investors worldwide to connect seamlessly across geographical boundaries and time zones, and helps to raise capital at a relatively lower cost (Dodd, 2013) by breaching the barriers posed by market segmentation (Stapleton & Subrahmanyam, 1977) and providing diversification benefits.
Note that both the interest payments, MH (T) r (M), and straight-line depreciation permitted under the tax code, δH (T)/n, are tax deductible. Upon investment, the property investor trades the tax shield benefits with two types of costs associated with debt financing when choosing a loan-to-value ratio. The first one, which is already addressed in Cannaday and Yang (1995, 1996), and McDonald (1999), indicates that the borrowing rate increases with the loan-to-value ratio, given that the investor is more likely to default when borrowing more. This positive relation is supported by the empirical study of Maris and Elayan (1990). The second one, which is novel to the literature, indicates that the expected growth rate of the net operating income is non-increasing with the loan-to-value ratio. This non-positive relation indicates that those who intend to rent commercial property may be willing to pay less when they realize that their landlord bears more debt and is thus, more susceptible to bankruptcy. This is plausible because those who rent in a commercial property, such as a shopping mall, would typically rather stay at the same place for a long period of time so that they can attract loyal customers. 5
Note: This table presents the Prais-Winsten regression results (with panel-corrected standard errors) for the sample of SA REITs from June 2013 to December 2016, separated by the South African exposure of firms. FBSI is the buy-sell index, in line with Kumar and Lee (2006), for foreign investors in SA REITs. Cap rate is the property-specific cap rate. Interest rate is the SA prime interest rate. JSE index is the JSE All Share Index. GDP growth is the GDP growth in the previous quarter. SA bond is the price of a 10- year SA government bond. Exchange rate is the rand/dollar exchange rate. GSFCI is the Goldman Sachs Financial Conditions Index, measuring financial conditions in the US based on the US T-bond yield, S&P500 index, federal funds rate, trade-weighted dollar and investment-grade credit spread. NAREIT is the return on the NAREIT all equity REIT index. US corporate bond represents the BUHY index. US and EU business confidence are based on the monthly OECD survey. Leverage is a firm’s leverage, defined as total liabilities divided by total assets. Size is the log of the market capitalisation for a particular REIT. IMPF is coded 1 for December 2015, 0 otherwise. DUAL is coded 1 for REITs with more than one share class. INDOFF, RET and OTH are binary variables for REITs specialising in office and/or industrial, retail or other property types. Diversified REITs are the reference group.
abnormally low coefficient of variation relative to other risky assets. That is why investing in realestate and hedge funds are preferred by institutional investors to diversify their portfolio. Investment choices are made as a consequence of assumptions, expectations and predictions of the future. As a result, there is large uncertainty about future returns (so there is risk involved). Risk is usually measured by determining the standard deviation (also called the volatility) of the historical returns of a specific investment. If several investment opportunities have the same return but different volatilities, a rational investor will select the investment that has the smallest volatility. In general, the higher the risk of an investment, the higher the expected return demanded by an investor. It is therefore important to be able to determine the risk of an investment as correct as possible. The expected return can be calculated with several methods, mainly with arithmetic and geometric method.
realestate securities or the contribution of professional REIT managers. Our analysis shows that only those REITs with poor performance (negative performance alpha) have a significant negative relation between short interest and REIT returns. That is, short interest is not indiscriminately associated with negative REIT returns. The results of a logistic regression model also show that the short selling of REIT shares can be explained by firm-specific factors. Specifically, the short selling of REIT shares is related to operating efficiency, fundamental value, and liquidity. In sum, the results are consistent with implications that short interests in REITs represent attempts to make short-term profits rather than general bearishness about realestate investments.
Realestate companies – 100% exemption as long as the property (i) is re-sold in 3 years; (ii) in the same state; (iii) without being re-sold again. Acquisition of property in the context of urban rehabilitation operations – 100% exemption upon certain conditions; (iv) 50% exemption from IMT when properties are held by open or closed realestateinvestment funds with public subscription.