The significance of Residential REITs in Japan as an Institutionalized property sector

Robbie Lin, Chyi Lin Lee and Graeme Newell

ERES from European Real Estate Society (ERES)

Abstract: Residential Real Estate Investment Trusts in Japan (residential J-REITs) have become an increasingly significant listed property sector recently. The purpose of this paper is to assess the effectiveness of residential J-REITs in a mixed-asset portfolio context in Japan by assessing the significance, risk-adjusted performance and portfolio diversification benefits of residential J-REITs over July 2006-August 2018. The findings showed that residential J-REITs generally delivered superior risk-adjusted returns compared with the other sub-sector J-REITs, stocks and bonds in Japan over July 2006-August 2018, with desirable portfolio diversification benefits in the full mixed-asset portfolio context. Importantly, residential J-REITs are observed as strongly contributing to the mixed-asset portfolio context in Japan across the portfolio risk spectrum, particularly in a post-GFC context. This indicates that residential J-REITs are effective and liquid residential property investment exposure in Japan. This also confirms the effectiveness of institutionalised residential J-REITs. Given the solid residential property market fundamentals in Japan, an increased level of the institutionalisation of residential J-REITs can be expected.

Keywords: Australia; Interest Rate Sensitivity; Japan; Sector-specific REITs; Singapore (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2019-01-01
New Economics Papers: this item is included in nep-sea and nep-ure
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2019_122

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