Foreign “Direct” and “Portfolio” Investment in Real Estate: An Eclectic Paradigm

Holsapple, Eric J.; Ozawa, Terutomo; Olienyk, John

doi:10.1080/10835547.2006.12089735

Cited by 20 publications

(25 citation statements)

References 2 publications

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“…Previous research (e.g. Holsapple et al , 2006; Johnson et al , 2006; Newell and Lee, 2017) have also considered exchange rate/currency risk as a major concern of foreign investors. To increase foreign investment in an emerging economy like India, apart from concentrating on domestic investment, it is important to improve the performance of listed property stocks.…”

Section: Discussionmentioning

confidence: 99%

Determinants of foreign and domestic non-listed real estate fund flows in India

Gupta

Newell

Bajaj³

et al. 2020

JPIF

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PurposeReal estate forms an important part of any economy and the investment in real estate, in turn, is impacted by the macroeconomic environment of that country. The purpose of the present research is to examine macroeconomic determinants of foreign and domestic non-listed real estate fund (NREF) flows and to examine whether they are similar or different for an emerging economy like India.Design/methodology/approachThe long and short-run cointegration between the time-series variables is estimated using the autoregressive distributed lag (ARDL) bounds test and error correction model (ECM) using quarterly data across the 2005–2017 period. ARDL is a suitable method for short time-series data.FindingsThe empirical results indicate that domestic NREF flows are positively and significantly impacted by real GDP and performance of listed real estate stocks (i.e. BSE realty index). Whereas, foreign NREF flows are positively and significantly impacted by the exchange rate, performance of listed real estate stocks and domestic NREF flows.Practical implicationsThe empirical results have significant implications for academicians, policy makers and real estate market practitioners. In the context of these results, some interesting insights are gained that would help in the implementation of the policies aimed toward increasing the fund flows in the real estate sector, which in turn would have a significant trickle-down effect on the Indian economy.Originality/valueThe existing literature looks at macroeconomic and other drivers of foreign investment in international real estate investments. However, there are very few studies on the determinants of domestic real estate investment flows and on determinants of NREFs' investment flows; particularly in emerging markets. The present study, in contrast, evaluates simultaneously the macroeconomic determinants of the domestic and foreign NREFs' investment flows in India. The ARDL and ECM method used has been applied for the first time to the study of NREFs.

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Section: Discussionmentioning

confidence: 99%

Determinants of foreign and domestic non-listed real estate fund flows in India

Gupta

Newell

Bajaj³

et al. 2020

JPIF

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“…Investment activities always have higher levels of internalisation than development activities, because the operational challenges of development are more complex than the process of crossborder investment into standing assets. Holsapple et al (2006) extended Dunning's OLI framework into the context of international real estate investments. They argue that international real estate investments are hybrids of direct (FDI) and portfolio investments (FPI).…”

Section: The Oli Paradigmmentioning

confidence: 99%

Determinants of foreign direct real estate investment in selected MENA countries

Salem

Baum

2016

Journal of Property Investment &Amp; Finance

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Purpose – The purpose of this paper is to identify the main determinants of foreign direct real estate investments (foreign direct investment (FDI)) in selected Middle Eastern and North African (MENA) countries. Design/methodology/approach – The empirical work of this study is an econometric analysis of FDI in the commercial real estate sector for eight MENA markets, namely Algeria, Egypt, Morocco, Qatar, Saudi Arabia, Turkey, Tunisia and the UAE during the period 2003-2009. The econometric analysis is carried out using the pooled Tobit model technique for panel data. Findings – The paper finds that both country-specific factors and real estate sector-specific variables consistently support hypotheses explaining commercial real estate-related FDI, and find evidence that political stability explains why some selected MENA countries attract more real estate investments than other MENA countries. Practical implications – The findings should be seriously considered in any policy making effort on the part of governments in the region. Originality/value – The authors contribute to the existing literature in many ways. First, the study aims to develop econometric models, using both conventional and unique variables, to be generalised and applied to any developed or emerging market. The study applies relevant techniques in estimating the models, including the pooled Tobit model. Second, the research studies eight selected MENA real estate markets from 2003 to 2009, a timeframe and geography not examined in previous published empirical work on commercial real estate investments. Lastly, and for the first time in real estate literature, the study applies the location dimension of Dunning’s OLI paradigm as a theoretical explanation for the behaviour of foreign investors in commercial real estate towards the selected MENA markets.

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“…This includes the ways in which formal and informal structures that comprise a market work to enhance or obstruct cross-border real estate acquisitions. Holsapple et al (2006) propose a modified version of the Dunning Eclectic Paradigm to examine how institutional factors impact the volume and destination of cross border real estate investment, noting the connections with both foreign direct (FDI) and foreign portfolio (FPI) investment activity. McAllister and Nanda (2016a) also discuss how foreign investment in commercial real estate has attributes of both FDI and FPI.…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, such activity is typically selective when it comes to the countries, cities and assets that are chosen for investment. Geurts and Jaffe (1996) and Holsapple et al (2006) draw attention to institutional factors, risks and costs that influence the destination of cross-border real estate investment, something that has been studied empirically at a country level, but which also applies to choices of locations and assets within target countries. It is the latter aspect that this paper seeks to explore further.…”

Section: Introductionmentioning

confidence: 99%

Only the Best? Exploring Cross-Border Investor Preferences in US Gateway Cities

Devaney

Scofield

Zhang

2018

J Real Estate Finan Econ

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Despite heady growth in cross-border investment into commercial real estate over recent decades, there are few studies that examine differences in investment preferences between domestic and cross-border investors at a micro level. We address the gap by examining the characteristics of assets acquired by cross border investors in six major US metro areas, comparing them with the purchases made by US investors in those same areas. Our study uses data on more than 67,500 transactions recorded by Real Capital Analytics (RCA) over the period from Q1 2003 to Q3 2016. As well as examining cross-border investors in aggregate, we isolate and examine purchases by investors from each of the four principal source nations for cross-border real estate investment in these cities. This is important since treating cross-border investors as a single group may obscure important differences between them. We employ multilevel logit techniques and we find across a number of specifications that cross-border investors prefer larger assets, newer assets and CBD locations regardless of nationality. However, temporal and sectoral patterns of investment, as well as evidence for return chasing behavior, vary with the nationality of investor being studied. Keywords Commercial real estate. Cross-border investment. Foreign investment. Investor preferences. Multilevel modelling. Return chasing behavior

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Foreign “Direct” and “Portfolio” Investment in Real Estate: An Eclectic Paradigm

Cited by 20 publications

References 2 publications

Determinants of foreign and domestic non-listed real estate fund flows in India

Determinants of foreign and domestic non-listed real estate fund flows in India

Determinants of foreign direct real estate investment in selected MENA countries

Only the Best? Exploring Cross-Border Investor Preferences in US Gateway Cities

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