International equity REITs: five major future directions
| DOI | https://doi.org/10.1108/JPIF-09-2019-0122 |
| Pages | 71-81 |
| Published date | 25 October 2019 |
| Date | 25 October 2019 |
| Author | David Parker |
| Subject Matter | Property valuation & finance,Property management & built environment |
International equity REITs:
five major future directions
David Parker
University of South Australia, Adelaide, Australia
Abstract
Purpose –The purpose of this paper is to analyze chapters from the recently published Routledge REITs
Research Handbook to identify five major future directions for international equity REITs.
Design/methodology/approach –Literature review and critical analysis of chapters from the recently
published Routledge REITs Research Handbook.
Findings –The five major future directions for international equity REITs are proposed to comprise an
increasingfocus on people and on cash flow rather thanon property (with the cognitive riskattaching thereto),
the changingnature of REITs asthey respond to changes insociety globally, theevolution of the globalflagship
REIT and the emergenceof global regulation of REITs (particularly in the spheres of debt and leverage).
Research limitations/implications –While five major future directions for international equity REITs
are identified which may have an impact on the risk/return profile, further research is required to determine
which directions may be significant and which trivial and which may be independent and which interactive.
Practical implications –Identification of five major future directions for international equity REITs
provides managers and promoters with guidance concerning potential areas of focus for future product
development in the REIT sector.
Originality/value –While quantitative researchconcerning internationalequity REITS abounds, qualitative
research is limited with little academic researchundertaken into possible futuredirections for the sector.
Keywords REITs, Future directions, Cash flow, Cognitive risk, Debt and leverage,
Global flagship property REIT
Paper type Literature review
1. Introduction
Equity REITs have been a highly successful international growth story over the last
50 years, expanding from a small handful in the early 1960s located in the USA, Netherlands
and Australia with a market capitalisation in the low millions of dollars to now being located
in 35 countries with a free float market capitalisation of $1.09 trillion at the end of January
2017 (Parker et al., 2018).
While an enormous amount of research has been undertaken into the perennial
questions: are REITs real estate? and what place do REITs have in a multi asset portfolio?,
as well as the role of manager costs, illiquidity, debt/leverage, volatility and a range of other
potential risk/return influences (see, for example, the literature reviews in Parker et al., 2018;
Lee and Moss, 2018), little attention has been given to researching the key structural
dimensions that will shape the international equity REIT industry in the foreseeable future.
Part I of the recently published Routledge REITs Research Handbook (Parker, 2018)
included several chapters providing a thematic review of emerging issues for international
equity REITs, written by highly regarded leading property academics from around the
world, including:
•Moss (2018a) considering the impact on the REIT market and on REIT industry
practice of the rapid rate of evolution of the REIT sector following the wave of
legislative changes in the USA in the late 1980s, leading to the modern REIT era of
the 1990s, followed by the global financial crisis of the 2000s leading to what has
become known as the post-modern REIT era.
•Reddy and Cho (2018) addressing the growing role of specialized property market
sectors as a source of assets for REITs. Where, previously, REITs focused on
Journal of Property Investment &
Finance
Vol. 38 No. 1, 2020
pp. 71-81
© Emerald PublishingLimited
1463-578X
DOI 10.1108/JPIF-09-2019-0122
Received 8 September 2019
Revised 13 September 2019
Accepted 13 September 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
71
International
equity REITs
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