Of Financialization and Metropolization. The case of the European REITs sector

The aim of this paper is to investigate if financialization and metropolization are two converging dynamics. We aim to verify if the most financialized European public property companies are also the main actors in the metropolization process through their portfolio arbitrages. We find that, between 2002 and 2016, the financialized European public property companies (F-companies) and the non-financialized European public property companies (NF-companies) exhibit a tendency to disinvest the non-urban spaces, to reinvest in the Hinterlands for the NF-companies, to reinvest in the Core for the F-companies, at least in relative terms. We also find that, in relative terms, the F-companies reallocated their portfolio toward the Large metropoles, in particular in Germany, France and Switzerland while the non-financialized REITs shifted their portfolio toward the others segments (exclusively toward the Metropoles segment for Sweden). Belgium is exception, with a reversed evolution. In order to analyze the differences in the behavior of F-companies and NF-companies, we introduce a new score transparency index. Our results suggest that F-companies are more transparent than NF-companies. They are larger in size, less dominated by insiders, are followed by more analysts and they have greater institutional ownership. The results of a logistic regression also show that F-companies have higher liquidity than NF-companies.