W.D. Fraser, C. Leishman and H. Tarbert
Correlation coefficients measuring the historical relationships of returns on commercial property and both equities and conventional gilts appear to be low. Conversely, the…
Abstract
Correlation coefficients measuring the historical relationships of returns on commercial property and both equities and conventional gilts appear to be low. Conversely, the correlation between gilts and equities appears to be relatively high. This implies that property provides diversification benefits to a mixed asset portfolio dominated by equities and gilts. However, there is some debate as to the reliability of these correlations and property’s diversification benefits. In this paper we use Granger causality tests and cointegration techniques to demonstrate that there is no long‐run relationship between property returns and those of either gilts or equities. This confirms the diversification benefits of including property in a mixed asset portfolio.
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The literature concerned with British regional housing markets has been relatively limited, especially in comparison to the research undertaken with regard to the commercial…
Abstract
The literature concerned with British regional housing markets has been relatively limited, especially in comparison to the research undertaken with regard to the commercial market. This paper aims to redress the balance primarily in two areas. First, the performance of regional housing markets over the period 1983 to 1995 is assessed and compared to comparable returns from the commercial sector and the UK equity and bond markets. The second area of concern is the inflation hedging ability of these markets. While a large number of studies have examined the UK commercial sector, the residential market has been largely ignored. The paper examines the issue using the Ordinary Least Squares (OLS) regression model proposed by Fama and Schwert (1977) and also on a long‐term basis using cointegration techniques. The results are mixed, with some evidence that the residential market provides a hedge, but with little evidence that the commercial market provides protection against inflation. While no evidence was found that either property sector is cointegrated with inflation, there was some evidence of causal relationships. Additionally, in both the performance appraisal and in the inflation tests, substantial differences were found between different regional markets.
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Hafez Abdo, Freeman Brobbey Owusu and Musa Mangena
The purpose of this study is to provide a harmonisation framework for the diverse accounting practices by extractive industries.
Abstract
Purpose
The purpose of this study is to provide a harmonisation framework for the diverse accounting practices by extractive industries.
Design/methodology/approach
The study takes a three-stage approach. The first involves a comprehensive literature review of the historical evolution of accounting regulations by extractive industries. The second involves constructing an accounting practice index for extractive industries. The third involves constructing a harmonisation framework.
Findings
The accounting practice index provides empirical evidence of the wide diversity of accounting practices by extractive industries. Analysis of the literature review addresses the several attempts by accounting and regulatory bodies to standardise the diverse practices of accounting by extractive industries and reasons for the lack of successful standardisations. The authors extract lessons from these previous attempts and propose a harmonisation framework.
Research limitations/implications
The proposed harmonisation framework can be used to align together the diverse accounting practices by extractive industries and enhance comparability and consistency of accounting figures and statements produced by these industries. Harmonising the diverse accounting practices is crucial for investment decision-making.
Originality/value
The harmonisation framework is the first of its kind that could enhance the comparability of accounts of extractive industries’ firms and be used to harmonise diverse accounting practices by other industries.
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Daniel Obereiner and Björn‐Martin Kurzrock
This paper seeks to shed light on the question whether German real estate investment vehicles provide an effective hedge against inflation. To do so it aims to investigate…
Abstract
Purpose
This paper seeks to shed light on the question whether German real estate investment vehicles provide an effective hedge against inflation. To do so it aims to investigate open‐end real estate funds, special funds and real estate stocks.
Design/methodology/approach
Traditional approaches as well as cointegration and causality tests are applied to monthly and quarterly index data from 1992:04 to 2009:12 for the subject investment vehicles.
Findings
There is strong evidence that real estate returns are almost independent from inflation in the short run. None of the investigated investment vehicles provide a hedge against expected and unexpected inflation at different lags. In contrast, cointegration tests show that real estate stocks, open‐end funds and special funds do provide a hedge against inflation in the long term. Likewise, causality tests suggest that real estate performance is influenced by inflation in the long term.
Research limitations/implications
The study still could not investigate closed‐end funds and G‐REITs. Yet, it does capture the most and comprehensive part of the indirect German real estate investment market.
Practical implications
Inflation‐hedging capabilities are of particular interest in periods of economic instability. Especially institutional investors with large asset portfolios seek to adjust their asset allocation to changing conditions.
Originality/value
To date, research papers on the subject of inflation‐hedging capabilities of real estate almost exclusively focus on REITs in the USA and in the UK. Research about the German real estate market and alternative investment vehicles is rare – partly due to a lack of transparency over the past – although international investors more and more adhere to the German real estate investment market.
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The COVID-19 pandemic is having an unprecedented impact on schools and schoolchildren across the globe. There is still a dearth of studies that investigate this recent phenomenon…
Abstract
The COVID-19 pandemic is having an unprecedented impact on schools and schoolchildren across the globe. There is still a dearth of studies that investigate this recent phenomenon in a developing country context, and this is true of Pakistan. Much of the population in Pakistan resides in rural settings and a lack of technology and of online provision of teaching for more than one year must have had huge negative impacts on students’ learning. The school dropout rate was already high in rural settings (Geven & Hasan, 2020) and, with school closures, this will likely have increased further, and cause some schoolchildren to lose interest in going back to school. However, no current data appear to exist to corroborate this. Due to the lack of available current quantitative and qualitative data, this study seeks to explore the impact of COVID-19 on schoolchildren’s education in Pakistan by examining recently published related studies. This study employs a literature review technique that gathers data to ascertain the potential overall impact on schoolchildren during the pandemic. The findings reveal that there remains a lack of detailed studies on this important topic and that urgent attention is needed from researchers to assess the scale of the impact. In addition, the review found that many children from rural communities had little to no school engagement due to technology poverty and their families being unable to support home-schooling, either due to family and/or work constraints or a lack of prior education and/or skills. Themes that emerged were that families, especially mothers, struggled to balance both caring and home-schooling duties, pupils from private schools had a better experience than those from public school backgrounds, and many of these reported that online provisions helped students develop new skills. This study may help to improve the understanding of the impact on the lost learning of schoolchildren during the pandemic by guiding practitioners as well as policymakers.
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Colin Jones, Neil Dunse and Kevin Cutsforth
The purpose of this paper is to analyse the gap between government bonds (index-linked and long-dated) and real estate yields/capitalization rates over time for the UK, Australia…
Abstract
Purpose
The purpose of this paper is to analyse the gap between government bonds (index-linked and long-dated) and real estate yields/capitalization rates over time for the UK, Australia and the USA. The global financial crisis was a sharp shock to real estate markets, and while interest rates and government bond yields fell in response around the world, real estate yields (cap rates) have risen.
Design/methodology/approach
The absolute yield gap levels and their variation over time in the different countries are compared and linked to the theoretical reasons for the yield gap and, in particular, a changing real estate risk premium. Within this context, it assesses whether there have been structural breaks in long-term relationships during booms and busts based on autoregressive conditionally heteroscedastic (ARCH) models. Finally, the paper provides further insights by constructing statistical models of index-linked and long-dated yield gaps.
Findings
The relationships between bond and property yields go through a traumatic time around the period of the global financial crisis. These changes are sufficiently strong to be statistically defined as “structural breaks” in the time series. The sudden switch in the yield gaps may have stimulated a greater appreciation of structural change in the property market.
Research limitations/implications
The research focuses on the most transparent real estate markets in the world, but other countries with less developed markets may respond differently.
Practical implications
The practical implications relate to how to value real estate yields relative to interest rates.
Originality/value
This is the first paper that has compared international yield gaps over time and examined the role of the gap between index-linked government bonds and real estate yields.
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The purpose of this paper is to scrutinise the effectiveness of four derivative exchanges’ enforcement efforts since 2007. These exchanges include the Commodity Exchange Inc. and…
Abstract
Purpose
The purpose of this paper is to scrutinise the effectiveness of four derivative exchanges’ enforcement efforts since 2007. These exchanges include the Commodity Exchange Inc. and ICE Futures US from the United States and ICE Futures Europe and the London Metal Exchange from the UK.
Design/methodology/approach
The paper examines 799 enforcement notices published by four exchanges through a behavioural science lens: HUMANS conceived by Hunt (2023) in Humanizing Rules: Bringing Behavioural Science to Ethics and Compliance.
Findings
The paper finds the effectiveness of the exchanges’ enforcement efforts to be a mixed picture as financial markets transition from the digital to artificial intelligence era. Humans remain a key cog in the wheel of market participants’ trading operations, albeit their roles have changed. Despite this, some elements of exchanges’ enforcement regimes have not kept pace with the move from floor to remote trading. However, in other respects, their efforts are or should be, effective, at least in behavioural terms.
Research limitations/implications
The paper’s findings are arguably limited to exchanges based in Anglophone jurisdictions. The information published by the exchanges is variable, making “like-for-like” comparisons difficult in some areas.
Practical implications
The paper makes several recommendations that, if adopted, could help exchanges to increase the potency of their enforcement programmes.
Originality/value
A key aim of the paper is to shift the lens through which the debate concerning the efficacy of exchange-level oversight is conducted. Hitherto, a legal lens has been used, whereas this paper uses a behavioural lens.
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G. Bowles, P. McAllister and H. Tarbert
Analyses the effect of valuation error on the implied precision of investment performance measurement of property assets. A prerequisite for measuring the absolute or relative…
Abstract
Analyses the effect of valuation error on the implied precision of investment performance measurement of property assets. A prerequisite for measuring the absolute or relative performance of commercial property investments is that valuations provide a reliable proxy for prices. However, there are conceptual and empirical grounds to suggest that uncertainty is inherent in the valuation process. This is primarily due to the structure of the commercial property market and the techniques and guidelines of the property valuation process. Sampling theory is used to measure portfolio valuation error confidence bands for hypothetical property investment portfolios based on different assumptions concerning assumed levels of valuation error, size of portfolio and number of measurement time periods. It is concluded that, for the majority of investment portfolios, property investment performance measures will include some uncertainty and thus the property fund manager should be sceptical of the implied precision in reported measures of return.
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Matti Christersson and Peggie Rothe
Relocation is a significant event in the course of an organization's lifetime. The purpose of this paper is to focus on the impacts that relocation has on the relocating…
Abstract
Purpose
Relocation is a significant event in the course of an organization's lifetime. The purpose of this paper is to focus on the impacts that relocation has on the relocating organization itself and to identify the economic, social, and environmental impacts of office occupier relocation.
Design/methodology/approach
Drawing from the existing literature on impacts of occupiers' relocation, a conceptual framework for modelling organizational relocation impacts is developed. The literature review is done by a systematic review of the ten most relevant journals within the corporate real estate, property, and facilities sector.
Findings
Relocation has various impacts including relocation costs, disruption, employee reactions to change, altered lease attributes, and changed environmental footprint. Further, the changes in productivity, employee satisfaction, employee turnover, organizational dynamics, ways of working, commuting, accessibility for external stakeholders, and organizational culture and image are all possible impacts of organizational relocation.
Research limitations/implications
The identified impacts are limited to office occupiers' short distance relocations. As the paper is conceptual by nature, there is a need for more empirical research on the impacts of relocation. The framework introduced in the article requires testing with experiences of relocated case companies and accordingly, it is to be developed further.
Practical implications
The paper provides central questions that relocating organizations should ask themselves.
Originality/value
Using the perspective of the relocating organization, the paper provides insight into the impacts of relocation from the expanded spectrum of Triple Bottom Line of sustainability. The study is of value to corporate real estate researchers and practitioners.
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Abeyratna Gunasekarage, David M. Power and Ting Ting Zhou
The purpose of this paper is to examine the long‐term relationship between the rate of inflation and the returns of real estate and financial assets traded in New Zealand markets.
Abstract
Purpose
The purpose of this paper is to examine the long‐term relationship between the rate of inflation and the returns of real estate and financial assets traded in New Zealand markets.
Design/methodology/approach
The question of whether these assets are good candidates to hedge inflation in the long run is addressed employing cointegration and causality tests on quarterly data for the period from December 1979 to December 2003.
Findings
A strong long‐term relationship was found between the returns offered by all types of real estate assets (i.e. residential, commercial, industrial and farm building) and the rate of inflation. However, such a long run relationship is not detected between the rate of inflation and the returns of financial assets (i.e. stocks, short‐term bills and long‐term bonds).
Research limitations/implications
The empirical findings reveal that the direction of causality is from inflation to real estate assets indicating that changes in property prices do not cause inflation in New Zealand; the cause of inflation is independent of the price movements for real estate assets. The real estate assets are found to offer an effective hedge against inflation in the long run. The same cannot be said for the financial assets, however.
Originality/value
This is the first New Zealand study which investigates the long‐term inflation hedging effectiveness of both real estate and financial assets. The findings should be of interest to most of the investors in New Zealand as the real estate assets play a significant role in their portfolio decisions.