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Is E-Commerce an Investment Risk Priced by Retail Real Estate Investors? An Investigation

Author

Listed:
  • Carina Kaiser
  • Julia Freybote

Abstract

The emergence of e-commerce over the last two decades has substantially disrupted the business of retailers operating physical stores. As a result, the question arises as to how e commerce in turn affects pricing of retail real estate assets and thus investors should be concerned with e-commerce. Using return series data of shopping centers from the NCREIF property index for the period of 2000 Q1 to 2018 Q4, we find that e commerce sales can predict changes in retail real estate market returns. In particular, an increase in the share of e commerce sales to total sales results in lower capital and total returns for retail real estate. In contrast, no impact on income returns was found. Alongside revealing that e commerce has informative value for investors, this study contributes to the broader literature on asset pricing in commercial real estate markets while bridges this gap in the retail real estate literature.

Suggested Citation

  • Carina Kaiser & Julia Freybote, 2021. "Is E-Commerce an Investment Risk Priced by Retail Real Estate Investors? An Investigation," ERES eres2021_150, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2021_150
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    More about this item

    Keywords

    Asset Pricing; E-commerce; Institutional Investors; Retail real estate;
    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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