Investors that invest in REIT mainly aim for high and long-term growth income and are also concerned about the risk associated with the investment. Besides that, the higher dividend payouts of REITs also encourage investors to invest in them (Ghosh & Sirmans, 2006). Thus, investors usually observe the financial performance of REITs from three perspectives, which are total return (Waggle & Moon, 2006; Brinson et al., 1995), systematic risk or beta coefficiency (Breidenbach et al. 2006; Clayton & Mckinnon, 2003), and dividend yield distribution (Ghosh & Shirman, 2006). Basically, total return, systematic risk, and dividend distribution are the best evaluators for evaluating M-REIT financial performance. Similar to stocks, REITs are also traded in the financial market on a daily basis; thus, the daily performance of REITs is generally evaluated through total return and systematic risk. Furthermore, REITs have a special tax regulation, which require that 90% of their taxable income is paid out as dividend distribution to shareholders (REIT Guideline, 2012). Additionally, the dividend distribution of REITs has a negative relationship with expected cash-flow volatility of REIT firms measured from the REIT firm property level diversification (Bardley, Capozza & Seguin, 1998).
An occupational lease is one under which a tenant who does not want to participate in the risks and rewards of long term investment would occupy, so it will typically be a lease for somewhere between 5 and 25 years at a rent equal to the full annual rental value of the property. Occupational leases will not normally acquire any significant value and the owner of such a lease merely pays rent for the right to occupy. The lease will contain details of the rent and the rights and obligations of the landlord and the tenant to each other. There are very few provisions implied by law into a lease of commercial property, so the practice is to set out all the terms in the lease itself. This can result in leases being anything up to 100 pages long, although most investment leases would not be that long. Even though there are a number of standard principles which one expects to see in a lease, there is no standard wording, so leases require careful negotiation by experienced lawyers.
Institutional investors hold significant equity levels in overseas RealEstateInvestment Trusts (REITs) and evidence reveals that their active participation brings tremendous benefits to the REIT markets. In Malaysia however, the level of institutional investment have historically been rather poor since the establishment of the first Listed Property Trust (LPTs) in 1989. Nowadays, interests in REITs are renewed in Malaysia due to encouraging government incentives and the revised regulations in Securities Commission Guidelines 2005. Axis REIT is listed and a number of REITs are planned for listing by corporations with large property portfolios in the near future. As the investment market welcomes exciting new opportunities, it is timely to consider the needs of institutional investors in Malaysia on the new REITs. This paper examines the reasons of lukewarm response from institutional investors in LPTs and their desirable investment conditions for participating in the new REITs. Finally, the intended actions from corporations planning to list REITs are obtained in response to the institutional investors’ needs. The findings from the paper depicts that the thin trading volume of LPTs, small market size of LPT market and slow capital appreciation are the main reasons deterring institutional involvement in LPTs market.
Studies aiming to find the links between realestate returns, economic and financial factors have been overwhelmingly carried out using US data. Chan et al. (1990) showed that changes in the default risk and the term structure of interest rates within a multifactor arbitrage pricing model helped to explain realestate returns movements proxied by returns on REITS. McCue and Kling (1994) applied an unrestricted VAR model to explore the linkages between the macroeconomy and realestate returns through time. The aim was to determine the extent to which the macroeconomic variables explain realestate returns and how these returns react to shocks in those variables. The macroeconomic variables used on by McCue and Kling were based on a model of firm investment behaviour by Lawrence and Siow (1985) which includes prices proxied by the consumer price index, short term nominal rates proxied by the three-month treasury bill-rate, output proxied by the Federal Reserve’ Industrial Production Index, and for investment the McGraw Hill Construction Contract Index. The results showed that the macroeconomic variables explained approximately 60% of the variation in realestate returns proxied the National Association of RealEstateInvestment Trust (NAREIT) equity REIT index, with nominal interest rates
Global realestate securities had a strong year, significantly outperforming the broad equity markets. Asia-Pacific and Europe saw sharp reversals from 2011 losses, while North America continued to produce strong total returns. In the United States, 2012 marked the fourth consecutive year of solid returns and outperformance versus the S&P 500 Index. This was characterized by sluggish GDP growth, but steady improvement in commercial property fundamentals due to a rebound in the housing market and declining unemployment. The U.S. Federal Reserve’s new quantitative-easing measures helped inflate asset prices. REITs’ financing costs declined as credit spreads continued to shrink, while expanding access to capital for second-tier REITs led to some mild cap-rate compression.
• Unrealized gains from realestate owned before the conversion into SOCIMI will be considered when an eventual transfer of the property takes place as generating income linearly during the ownership period (unless other distribution is proven), with the resulting profits subject to the corresponding tax treatment at that time they are deemed to have arisen. This rule is also applicable in cases of income obtained on the transfer of shares in other SOCIMIs or similar entities as well as on the transfer of other assets.
The ordinary easement, in the new Civil Code called a servitude (služebnost), affects the owner thereof so that the owner has to tolerate or abstain from doing something in favour of someone else either for a definite or an indefinite period of time. This right to use a property owned by someone else can be held by specific individuals or can be held ‘in rem’. A right ‘in rem’ is created for the benefit of another property and all owners of that property are entitled to benefit from it. A person entitled under servitude may seek protection of his rights and this protection is guaranteed to the same extent as in the case of a right of ownership. A servitude includes everything that is required for its exercise. Such rights or easements are mostly used to create rights of way, rights to erect and maintain electrical or other supply lines, and to prevent or control development on certain land.
The objective of this chapter is to study the potential e¤ects of macro-policy and bank shocks on the German realestate sector. In particular, I estimate a structural vector autoregression (SVAR) model using both aggregate German and two largest regional states of Bavaria and Nordrhein - Westfalen (NRW) data for commercial property, bank loan, and other macro-policy variables from 1975 to 2004. Numerous authors have examined the e¤ects of bank loans and general price level shocks on both residential and commercial realestate variables with a bag of non-resolute results (e.g. Iacoviello (2005), Davis and Zhu (2004), Tsolacos and McGough (1999), Ho¤man (2002)). A variety of techniques have also been used to examine these relationships. Econometric models and time series approaches have both been employed. Among the previous studies, it is well known that analysis that employs a single equation setup (Goodhard, 1995) potentially su¤er from simultaneity problems. Consequently, I use a VAR approach to analyze the dynamic relationship between bank lending (CR), commercial property prices (PP), investment in construction (INV), and Gross Domestic Product (GDP) for Germany, Bavaria, and NRW.
an existing company elects to become a UK-REIT. The same applies where a group of companies elects to become a group UK-REIT. Where a company that is already a UK-REIT buys a new property, no special charge beyond normal stamp duty land tax will be levied. If a company that is already a UK- REIT acquires a company that owns a property, the rules applicable to a group UK-REIT apply and an entry charge will be levied in respect of the property owned by the acquired company. In all cases, the entry charge will be 2% of the market value of the property assets that are transferred to the tax-exempt business. This entry charge will be collected in the same way as corporation tax due for the first accounting period for which the company is a UK-REIT or, as the case may be, becomes part of a group UK-REIT.
Together with the general increase in the standard of living of the population, the available funds of the population of the country also increase and, therefore, household savings, according to the Czech Statistical Office in the second quarter of 2018, the saving rate reached 9.8% of revenues, which was a year-on-year increase of 0.4 p. p. Growth in household savings also raises the need to keep these funds in the future until the need for such funds is expected . The manners in which households can free their funds are many , depending on the approach to risk, the required liquidity, the required return, the confidence of the population in individual financial products, and especially on the level of awareness of the household. One of the options households invest in is buying realestate . Investmentrealestate can be defined as realestate that is purchased with the intent of its commercial use and not solving own housing needs, which are already solved in another way (by owning other property, for example) . The aim of the contribution is to determine the return on investmentrealestate and the payback period of such investment.
Christopher Merrill is the Co-Founder, President, and CEO of Harrison Street RealEstate Capital a realestate private equity firm that manages private equity funds and public securities products. Mr. Merrill is also a Member of the Board of Directors and Chairman of the Investment Committee of the Company. The firm has raised three opportunistic realestate funds as well as an open-ended core property fund which have raised over $2.0 billion in capital from some of the largest US and European Pension Funds, Corporate Plans, Insurance Companies, Endowments and family offices. The firm’s private funds have the unique strategy of investing in Education, Healthcare and Storage related properties throughout the US. In addition, Harrison Street Securities LLC, a firm Mr. Merrill and his partners acquired in 2011, currently manages over $475 million in REIT securities through three, distinct long only product offerings.
That position has been reached through many different strands of research — from academics, specialist commercial researchers and research-minded portfolio managers in different countries, not always easily communicated between those spheres. Much of it, indeed, remains private rather than public — confined to the top levels of major investors and their advisors. Having held senior positions in all those fields of research, Andrew Baum is singularly well qualified to draw the strands together into a coherent and accessible statement of the state of the art in applied property research. In a world swept by radical change — globalisation of investment markets, financial engineering of investment vehicles, the collection and dissemination of information — we can be sure that the state of the art will be transformed again over the coming decade. Here too the book offers a clear view of the next steps in the evolution of the industry, which will be read with keen interest by all those involved in it.
Many studies on Malaysian REITs (RealEstateInvestment Trust ) have shown the ability to provide diversification benefits in the investment portfolio. The strong support from the Malaysian government such as the relaxation of taxable income and other incentives are still inadequate to convince the institutional investors to include REITs in their investment portfolio. The unique characteristics of Malaysian REITs in term of asset allocation caused it difficult to be evaluated by the investors. A few factors such as type of property, location, size of firm and capital structure of REITs had been identified as realestate allocation decision (READ) to influence REITs performance. While Malaysian REITs’ performance are based on expected return (ER), beta coefficient (β) and dividend payout (Div). Multiple regression analysis (MRA) is utilized to assess the significant level of influence of READ on performance. The study objective is achieved with mixed results. It showed that only Div had significant influence (R 2 value: 64%), while ER and β are insignificant (both R 2 value less than 6%). This indicated that investors seek a long term goal in REITs investment and stable distribution than price appreciation. This study suggests an outline of READ for Malaysian REITs. The outline of READ then was assessed through the past performances of Malaysian REITs to rationalize the characteristic, strength and weakness of influencing variables.
dramatically. In dealing with cycles of both bubbles and bursts, participants in the realestate industry have been forced to develop new strategies for capitalizing on the value of realproperty assets. One of the most noteworthy developments during this time has been the growth of realestateinvestment trusts (REITs) as preferred investment vehicles in the Canadian public markets. The advent of REITs has allowed for the securitisation of investment-grade realproperty that would be otherwise illiquid. 1 This change did not occur overnight and, in fact, required important shifts in both Canada’s economy and the legal landscape. 2 This dissertation will explore the Canadian REIT sector and will advance the argument that legislative amendments have been a crucial factor in driving the growth of REITs towards the multi-billion-dollar industry they are today. While this work will focus primarily on the development of legislation pertinent to REITs, it is important to note that statutory provisions cannot be analysed in isolation from the economy; market conditions must also be afforded some degree of consideration.
suggest that the explanatory power of betas on EREITs’ returns is sensitive to market conditions. Adopting the autoregressive conditional density function model of Hansen (1994), Bond and Patel (2003) try to investigate the distribution symmetry of listed property companies and whether the skewness is time-varying if it does exist. They examine monthly returns of 16 UK property companies from January 1970 to March 2000 and 16 US REITs from January 1977 to December 2000. The rather small sample size is caused by the restricted criteria imposed by the authors. First of all, the selected firms must be continually listed throughout the entire sample period. Further, they delete any firms that have at lease 10 percent of monthly returns equal to zero. Ten UK companies and 16 US REITs have significant unconditional skewness coefficients. However, under the student’s t-distribution, less than half of the companies analyzed reject the symmetry hypothesis. They find weak evidence (one quarter of their sample) of time-varying skewness. Furthermore, the authors find no evidence that the skewness is related to either economic cycles or companies’ market capitalization.
The first step for a prospective loan buyer in reviewing loan documents should be to analyze the key terms of the loan agreement. In particular, the buyer will need to understand the payment terms under the loan, including the schedule of payments, how payments are made, the interest rate, the maturity date, any options to extend the maturity date and the requirements for any such extension. The prospective buyer should also ascertain the current loan-to-value ratio with respect to the loan, as well as inquire into other aspects of the loan, such as the existence of impound accounts, balancing requirements, and debt coverage ratios. The loan documents should contain most, if not all, of the typical covenants, defaults provisions and remedies found in loan transactions. Standard borrower covenants might include financial covenants with respect to the borrower entity (including, without limitation, requirements to submit financial statements, maintain a specified minimum net worth or net working capital amount), covenants to maintain, repair, insure and pay taxes due with respect to the property, prohibitions against additional financing, covenants with respect to the borrower's entity status (i.e. single purpose entity covenants) and covenants to comply with all legal obligations. It may also be helpful for the buyer to prepare income and expense projections with respect to the loan or loans being purchased to ascertain whether the projections satisfy the buyer's investment objectives.
With more than 600 lawyers globally, DLA Piper boasts the world’s largest realestate practice and is consistently top-ranked around the world. As realestate develops into a truly global industry, the ability to quickly and efficiently provide legal services in structuring cross- border investments and transactions is paramount. DLA Piper clients value the team’s global resources, regional strength and local delivery, and include private and public companies, institutional investors and government entities. Within Australia, DLA Piper has a large team of lawyers in offices in five capital cities - Brisbane, Canberra, Melbourne, Perth and Sydney - with years of experience in the local realestate industry. They advise on issues affecting all stages of the propertyinvestment and development cycle, no matter what the jurisdiction. Additionally, many are active members of and contributors to the major business and industry associations, which have a key role in formulating policies and shaping the future of the Australian realestate industry.