The financialization of real estate in megacities and its variegated trajectories in East Asia

Abstract

This chapter sheds light on the forces that drive global financial investment into the real estate markets of megacity regions across the world. Although financial approaches and metrics of valuation stem from the Anglo-American investment culture, their rooting in different institutional contexts produces varied trajectories of financialization. Hybridization dynamics are seen especially in East Asia, where local cultures and institutional arrangements were not initially fit to integrate Western investment concepts. This chapter highlights the diverging patterns of real estate financialization in three East Asian countries /regions: Japan, Hong Kong, and Mainland China. It is based on a framework that combines three key elements: i) the representations of 'investable' markets by the global financial industry; ii) the initiatives taken by state agencies to provide a supportive environment for financial investment; and iii) the response by property developers to the supply of market capital in the built environment.

The multiple faces of financialization: Financial and business services in the US economy, 1997–2020

“…Furthermore, our main results demonstrate that the real estate sector has been an important and central sector of the US economy, a claim that has been indicated by the respective literature, as well (Aalbers, 2008; Fernandez et al, 2016; Fernandez and Aalbers, 2016). Aveline-Dubach (2020), for instance, reports that in 2017 the vast majority of the 50 largest private equity real estate firms in the world were headquartered in the US. With regard to real estate investment trusts (REITs), which are entities that hold financial securities dedicated to long-term property investments, the “US accounts for 64% of the REIT market capitalization globally (US$1069 billion in 2017) with 224 publicly-traded structures” Aveline-Dubach (2020: 398).…”

“…Aveline-Dubach (2020), for instance, reports that in 2017 the vast majority of the 50 largest private equity real estate firms in the world were headquartered in the US. With regard to real estate investment trusts (REITs), which are entities that hold financial securities dedicated to long-term property investments, the “US accounts for 64% of the REIT market capitalization globally (US$1069 billion in 2017) with 224 publicly-traded structures” Aveline-Dubach (2020: 398). The latter observation is also consistent with the empirical research on the centrality of economic sectors and the inter-sectoral linkages.…”

Financializing nursing homes? The uneven development of Health Care REITs in France, the United Kingdom and Japan

“…Indeed, the establishment of REIT channels requires significant effort by central governments – inter alia, the creation of dedicated legal and regulatory frameworks, the transparent mediation of information and standardization of performance metrics and assessments. However, the vehicles can also be efficiently used to pursue macroeconomic goals, such as deleveraging a failing banking sector (Aveline-Dubach, 2020, 2022; Waldron, 2018) or creating an environment conducive to foreign and domestic investment in a national or urban economy (Aveline-Dubach, 2017). In the context of fiscal austerity, REITs offer state authorities ready-to-use solutions to release public capital through the large-scale privatization of welfare properties.…”

Housing (In)Equity and the Spatial Dynamics of Homeownership in France: A Research Agenda

“…Financialisation tendencies are geographically uneven and variegated across institutional and cultural contexts (Aveline‐Dubach 2020; Fernandez & Aalbers 2016; Pike & Pollard 2010). Research has shown how the distinctive geographies of places shape financialisation processes, such as in the way that middle‐class suburbs were targeted as a valuable market for securitisation of debt in the US (Langley 2006).…”