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Aims to alert members of the surveying professions to the potential weaknesses of property company accounts. Discusses the valuation of investments, the disposal of investment properties, capitalization of interest and off‐balance‐sheet finance. Examines the implications of poor property company financial reporting for the surveying professions. Concludes that a distrust of both internal and external valuations should be of considerable concern to the surveying profession.

This paper examines the short and long‐term comovements among UK regional property markets over the period 1976‐2001. The markets examined are London, Outer South East, East Anglia, South West, East Midlands, West Midlands, Yorkshire and Humberside, North and North West. Multivariate cointegration procedures, Granger non‐causality tests, level VAR and generalised variance decomposition analyses based on error‐correction and vector autoregressive models are conducted to analyse relationships among these markets. The results indicate that there is a stationary, long‐term relationship and a number of long‐term causal linkages between the various UK property markets. In terms of the percentage of variance explained, other regional markets are generally more important than innovations in a given region, though this is not the case for the Outer South East. The Outer South East market is segmented from the other regional markets, though also extremely influential in explaining forecast variance in these markets. The overall suggestion is that opportunities exist for portfolio diversification in the UK regional property market, and the Outer South East market should be seen as containing valuable information for forecasting performance in the regional markets.

The purpose of this paper is to analyse the NAV discount of European REITs listed in France, the Netherlands and the UK between 2003 and 2014, considering elements of both “rational” and “noise trader” approaches.

The analysis examines the hypothesis that discounts (premiums) are the result of leverage, size, liquidity, risk, performance, investment activity and sentiment. The regressions are initially run against the traditional NAV discount, subsequently using the unlevered NAV discount measure introduced by Morri et al. (2005) in order to clean out the bias generated by the level of leverage. The NAV discount is then adjusted for investor sentiment (appraisal reduction) with the aim of better identifying firm-specific factors, considering distortions induced by sentiment.

Higher liquidity commands lower discounts for French REITs, while Dutch and British REITs, which trade in markets characterized by a higher number of average daily transactions, do not seem to feature discounts resulting from liquidity. For all three samples, operational risk and performance are significant in explaining the NAV discount, the former having a positive relationship with the discount, and the latter a negative one. When measured using the average sector discount, sentiment has a profound effect on the discount, accounting alone for 10-15 per cent of the explanatory power of the model.

REITs listed in different markets behave differently. When the discount is adjusted in order to remove the bias resulting from the level of debt, the relationship between leverage and the unlevered discount becomes less pronounced in all cases.

The paper considers a new approach to NAV discount puzzle that takes into account market sentiment and appraisals.

The purpose of this paper is to explore the levels and determinants of net asset value (NAV) premiums/discounts for publicly traded Australian Real Estate Investment Trust (A-REIT) market during the last decade. A-REITs were severely affected by the global financial crisis as S&P/ASX 200 A-REIT index-listed property stocks experienced 47 per cent discount to NAV, on average, in 2008–2009 crisis. Since 2013, A-REIT sector has exhibited a strong recovery from the financial crisis and traded at high premiums to date. Understanding the relationship between pricing in the public and private real estate markets has taken on great importance as A-REITs continue to trade at significant premium to NAV unlike their counterparts in the USA and Europe.

This paper follows a rational approach to explain variations in NAV premiums and explores the company-specific factors such as liquidity, financial leverage, size, stock price volatility and portfolio diversification behind the A-REIT NAV premiums/discounts. The study specifies and estimates a model of cross-sectional and time variation in premiums/discounts to NAV using semi-annual data for a sample of 40 A-REITs over the 2008–2018 period.

The results reveal that A-REIT premiums to NAV can be explained not only by the liquidity benefit of listed property stocks but also positive financial leverage effect. During the past decade, A-REITs have followed an aggressive approach in financing their growth by using borrowed funds to purchase assets as the income from the property offsets the cost of borrowing and the risk that accompanies it. Debt-to-equity ratio has to be considered as an important source of NAV premiums as highly geared A-REITs that favoured debt financing over equity financing traded at significant premiums to NAV of their underlying real estate assets.

The paper includes implications for the REIT market investors. The regression analysis shows that specialty A-REITs with a focus on creative market niches traded at higher premiums compared with other property stocks, especially in the post-GFC recovery period. Specialty REITs are more highly valued by the market than their traditional specialised counterparts (e.g. office and retail REITs), and those pursuing a diversified strategy.

This paper presents an Australian case study as the A-REIT market provides a suitable environment for testing the effect of financial gearing on the REIT premium to NAV. The study provides empirical evidence supporting the importance of debt-to-equity ratio in explaining the variation in A-REIT NAV premiums.

The closed‐end fund puzzle is one of the most famous unsolved issues in financial economics and as such, over time, it has raised the interest of many authors also in the real estate field. The aim of this paper is both to determine whether the effect of leverage on net asset value (NAV) discount is biased by an accounting effect as well as to investigate the determinants of NAV discount by means of the “rational” approach.

The hypotheses are tested by using both the traditional formula as well as a new, unlevered one to calculate the NAV discount. A best subset analysis is carried out to ascertain the better set of determinants.

The main result of the analysis is that the influence of leverage on the NAV discount is biased by an accounting effect while other factors are highly significant.

This paper is a starting point for additional research on some of the identified factors as well as on similar samples for which a wider set of data is available.

The homogeneity of the Italian real estate investment funds sample, which is not biased by any fiscal effect, and the use of an unlevered formula to calculate NAV discount are important factors when trying to understand the determinants of NAV discount.

Presents results of an investigation of the inflation‐hedging characteristics of UK property. Evaluates the various methods of decomposing inflation into its “expected” and “unexpected” components, using new time series data on inflation expectations produced by a questionnaire survey of informed market participants. Utilizes the power and suitability of causality and cointegration analysis to examine the relationship between inflation and property returns. Analyses the sensitivity of the results about the hedging capabilities of property to the removal valuation induced “smoothing” from property returns. Concludes that property is best seen as offering hedging characteristics that are only revealed in the long run.

This paper aims to test the hedging ability of housing investment against inflation in Japan and the USA during the period 2000–2020.

This study applies the deep learning method and The exponential general autoregressive conditional heteroskedasticity in mean (1, 1) model with breaks.

Within the asymmetric framework, it is found that housing returns (HR) can hedge against inflation in both these markets, which mentions that when investing in the housing market in Japan and the USA, investors are compensated for bearing from inflation. This result is consistent with Fisher’s hypothesis. Especially, the empirical results show that the risk-return tradeoff is available in Japan’s housing market and not available in the US housing market. Any signal of a high inflation rate – referred to as “bad news” – may cause a drop in HR in Japan and a raise in the USA.

To the best of the author’s knowledge, this is one of the first studies using the deep learning method (long short-term memory model) to estimate the expected/unexpected inflation rates.

Employing the panel data methodology, we examine the capital structure determinants of 83 property companies quoted in the UK. The empirical test reveals how the debt‐equity structure of the companies is influenced by the various firm‐specific attributes and macro‐economic factors. In particular, the evidence shows that asset structure, business orientation, and the level of involvement in property development are significant determinants of the corporate debt policy of property companies. Financial distress consideration also has a significant influence. In addition, the empirical evidence shows that corporate property managers take into consideration the prevailing market sentiment and borrowing costs when making the debt‐equity choice. Corporate performance and tax burden, however, do not appear to have any significant effect on the capital structure decision of property companies.

Suggests that recent attempts to measure the inflation‐hedging characteristics of commercial property use an inappropriate methodology. As a result the conclusions of much of this body of work are of dubious value. Having an income and capital repayment linked to inflation, index‐linked gilts appear to be a good hedge against inflation. Applies traditional regression‐based inflation hedging tests to UK index‐linked gilts. The tests suggest that index‐linked gilts are not a hedge against inflation. There is an anomaly. The anomaly is resolved through explicitly defining a hedge against inflation and, given the definition, building a model to test if index‐linked gilts are a hedge against inflation. Concludes that index‐linked gilts are a hedge against inflation and that the regression‐based methodology is an inappropriate one. Given this finding, uses the procedure to assess the inflation‐hedging capacity of a single standard UK commercial property. It is found that property is around 20 per cent prone (80 per cent inflation proof). Finds the impact of the number of years between reviews, the level of yield and the level of gearing to be significant in the inflation‐hedging capacity of UK commercial property. Finally, the assumption of single property is relaxed to consider the characteristics of the portfolio of investment. This does not significantly change the results.

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.