Performance of real estate investment in capital market
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2012
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2555
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eng
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117 leaves : ; 30 cm.
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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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National Institute of Development Administration. Library and Information Center
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Jiroj Buranasiri (2012). Performance of real estate investment in capital market. Retrieved from: http://repository.nida.ac.th/handle/662723737/577.
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Performance of real estate investment in capital market
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Abstract
The real estate investment is growing and become more important investment for many reasons. Institutional and individual investors demand assets with low correlation to diversify their risk and improve their investment performance. The accelerating trend of aging population in many countries demands a safer and more stable income producing investment vehicles. In practice, real estate investment could be done directly through the purchase of real properties or indirectly through the investment of real estate securities in capital market such as property funds or Real Estate Investment Trusts (REITs). However, the second way provides more flexibility to investors. The investment in capital market allows small investors with less capital to participate in real estate investment and creates liquidity for investors. Meanwhile, the capital market helps real estate developers to mobilize funds for their projects. Funds could be mobilized from both domestic and foreign investors to support the growth of countries, especially developing countries which have limited capital. This research focuses on the performance of the investment in real estate securities in both primary and secondary markets. Equity Real Estate Investment Trusts and property funds are used to represent the real estate securities because they raise funds from investors to invest in real estate for the rent and price appreciation of underlying real properties and distribute most of the profits back to investors. The objective of this research is to investigate the bond characteristic of real estate investment securities by examining the IPO impact on the investment performance in the primary market and micro- and macro- factor effects on the investment performance in secondary market. Besides, this research use Cox, Ingersoll, and Ross (CIR) model which is the stochastic model used in building term structure of interest to test whether the long-term holding period return of real estate securities reflect the ground assumption in the similar way as bond instruments. Understanding the performance of real estate securities is crucial. The findings of this research are very useful in different ways. Investors will know what information is relevant to the investment return of real estate securities and can use this knowledge to improve their investment performance. Consequently, more investors would participate in trading of these securities, and real estate developers would be able to raise funds easier and at the appropriate cost. In addition, investors’ wealth will be created sustainably and the economic expansion will go on smoothly.
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Thesis ( )--National Institute of Development Administration.