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The Determinants of International Commercial Real Estate Investment

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  • Karsten Lieser
  • Alexander Groh

Abstract

We examine the determinants of international commercial real estate investment using a unique set of panel data series for 47 countries worldwide, covering the period from 2000 to 2009. We explore how different socio-economic, demographic and institutional characteristics affect commercial real estate investment activity by determining both cross-sectional and time-series estimators, running augmented random effect panel regressions. We provide evidence that economic growth, rapid urbanization and compelling demographics attract real estate investment, and also demonstrate that a lack of transparency in the legal framework, administrative burdens of doing real estate business, socio-cultural challenges and political instabilities reduce international real estate allocations. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Karsten Lieser & Alexander Groh, 2014. "The Determinants of International Commercial Real Estate Investment," The Journal of Real Estate Finance and Economics, Springer, vol. 48(4), pages 611-659, May.
    • Handle: RePEc:kap:jrefec:v:48:y:2014:i:4:p:611-659
    DOI: 10.1007/s11146-012-9401-0
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    5. Frenzel Baudisch, Coletta & Dresselhaus, Carolin, 2018. "Impact of the German real estate transfer: Tax on the commercial real estate market," Finanzwissenschaftliche Arbeitspapiere 100, Justus Liebig University Giessen, Fachbereich Wirtschaftswissenschaften.
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    9. Arkadiusz Górski & Agnieszka Parkitna & Kamila Urbańska, 2021. "Identification of risks of investments into residential premises for rent in Poland," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 31(4), pages 53-68.
    10. Patrick Krieger & Carsten Lausberg & Kristin Wellner, 2018. "Einblicke in die Gründe für nicht-normalverteilte Immobilienrenditen: eine explorative Untersuchung deutscher Wohnimmobilienportfolios [Insights into the reasons for non-normal real estate returns:," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 4(1), pages 49-79, November.
    11. Fabozzi, Frank J. & Xiao, Keli, 2017. "Explosive rents: The real estate market dynamics in exuberance," The Quarterly Review of Economics and Finance, Elsevier, vol. 66(C), pages 100-107.
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    More about this item

    Keywords

    Real Estate Investment; International Asset Allocation; Real Estate Market Attractiveness; Augmented Random Effect Panel Regression; C33; C23; G11; G23; G24; O16; O18; P25; P52;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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