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The significance of Residential REITs in Japan as an Institutionalized property sector

Author

Listed:
  • Robbie Lin
  • Chyi Lin Lee
  • Graeme Newell

Abstract

Residential Real Estate Investment Trusts in Japan (residential J-REITs) have become an increasingly significant listed property sector recently. The purpose of this paper is to assess the effectiveness of residential J-REITs in a mixed-asset portfolio context in Japan by assessing the significance, risk-adjusted performance and portfolio diversification benefits of residential J-REITs over July 2006-August 2018. The findings showed that residential J-REITs generally delivered superior risk-adjusted returns compared with the other sub-sector J-REITs, stocks and bonds in Japan over July 2006-August 2018, with desirable portfolio diversification benefits in the full mixed-asset portfolio context. Importantly, residential J-REITs are observed as strongly contributing to the mixed-asset portfolio context in Japan across the portfolio risk spectrum, particularly in a post-GFC context. This indicates that residential J-REITs are effective and liquid residential property investment exposure in Japan. This also confirms the effectiveness of institutionalised residential J-REITs. Given the solid residential property market fundamentals in Japan, an increased level of the institutionalisation of residential J-REITs can be expected.

Suggested Citation

  • Robbie Lin & Chyi Lin Lee & Graeme Newell, 2019. "The significance of Residential REITs in Japan as an Institutionalized property sector," ERES eres2019_122, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2019_122
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2019-122
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Australia; Interest Rate Sensitivity; Japan; Sector-specific REITs; Singapore;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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