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Analyzing the Relationship between the Features of Direct Real Estate Assets and Their Corresponding Australian—REITs

Author

Listed:
  • Xinyi Li

    (School of Architecture and Built Environment, The University of Adelaide, Adelaide, SA 5000, Australia)

  • Yuhong Zhang

    (Faculty of Business, City University of Macau, Macau 999078, China)

  • Xing Zhang

    (School of Management, Guizhou University of Commerce, Guiyang 550001, China)

  • Runtang Gu

    (School of Management, Guizhou University of Commerce, Guiyang 550001, China)

Abstract

This study investigated the relationship between a sector-specific Australian Real Estate Investment Trust (A-REITs) and the underlying property assets in its property portfolio. The existing studies have assessed the connectedness/correlation between the A-REITs market and a variety of other asset markets, including the overall stock, bond, and direct real estate markets. This study applied regression analysis methods and discovered that there exists a certain degree of linear correlation between the underlying property assets and the return of the subject A-REITs. The most significant variable is the occupancy of the offices. The higher the occupancy is, the better the dividend can be. Features of the A-REITs also affect the dividend outcomes, specifically, the total portfolio market value and the capitalization rate. This suggests that the annual valuation outcomes show a positive relation with the performance of the A-REITs.

Suggested Citation

  • Xinyi Li & Yuhong Zhang & Xing Zhang & Runtang Gu, 2023. "Analyzing the Relationship between the Features of Direct Real Estate Assets and Their Corresponding Australian—REITs," IJFS, MDPI, vol. 11(1), pages 1-15, February.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:1:p:29-:d:1054506
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    References listed on IDEAS

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    1. Anthony J. De Francesco & Luke R Hartigan, 2009. "The impact of changing risk characteristics in the A‐REIT sector," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 27(6), pages 543-562, September.
    2. Zhu, Zhaobo & Harrison, DavidM. & Seiler, MichaelJ., 2020. "Preference for lottery features in real estate investment trusts," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 599-613.
    3. Sheharyar Bokhari & David Geltner, 2018. "Characteristics of Depreciation in Commercial and Multifamily Property: An Investment Perspective," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 46(4), pages 745-782, December.
    4. Thi Thu Ha Nguyen & Faruk Balli & Hatice Ozer Balli & Iqbal Syed, 2022. "Direct real estate, securitized real estate, and equity market dynamic connectedness," Applied Economics, Taylor & Francis Journals, vol. 54(23), pages 2658-2677, May.
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