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Performance of Canadian E-REITs


  • Lawrence Kryzanowski

    () (Finance Department, John Molson School of Business, Concordia University, 1455 de Maisonneuve Blvd. West, Montreal, Quebec, Canada, H3G)

  • Margarita Tcherednitchenko

    () (Finance Department, John Molson School of Business, Concordia University, 1455 de Maisonneuve Blvd. West, Montreal, Quebec, Canada, H3G)


The return performance and factor sensitivities of Canadian equity real estate investment trusts (E-REITs) are examined. Today, typical and average Canadian E-REIT IPOs are correctly priced based on first-day and subsequent short-run returns. The overpricing evident earlier in the 1993-96 period for typical and average E-REIT IPOs has corrected. E-REITs are equity investments with about one-half the market risk, and greater ensitivity to interest-rate changes, than the S&P/TSX Composite Index. E-REITs outperformed the S&P/TSX Composite over the 1996-2004 period on a return, risk, and market- and/or risk-adjusted basis. Thus, E-REITs provided material diversification benefits with no sacrifice in return, when added to a common stock portfolio during the studied period.

Suggested Citation

  • Lawrence Kryzanowski & Margarita Tcherednitchenko, 2007. "Performance of Canadian E-REITs," International Real Estate Review, Asian Real Estate Society, vol. 10(2), pages 1-22.
  • Handle: RePEc:ire:issued:v:10:n:02:2007:p:1-22

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    References listed on IDEAS

    1. Richard J. Buttimer & David C. Hyland & Anthony B. Sanders, 2005. "REITs, IPO Waves and Long-Run Performance," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 33(1), pages 51-87, March.
    2. Below, Scott & Zaman, Mir A & McIntosh, Will, 1995. "The Pricing of Real Estate Investment Trust Initial Public Offerings," The Journal of Real Estate Finance and Economics, Springer, vol. 11(1), pages 55-64, July.
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    More about this item


    equity REIT; IPO; interest-rate sensitivity; risk-adjusted return performance;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services


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