Impact of Inflation on Indirect Real Estate Investments in Nigeria

Daniel Dabara, Augustina Chiwuzie, Olusegun Omotehinshe, Daniel Dabara and John Oyekunle Soladoye

ERES from European Real Estate Society (ERES)

Abstract: The study aims at investigating the impact of inflation on securitized real estate investments in Nigeria with a view to providing information to aid real estate investors in making informed investment decisions. The time frame for the study covers between 2007 and 2016. All the securitized real estate investments including both REITs and non REITs were used in the study. The population for the study comprised of all securitized real estate companies in Nigeria namely Skye Shelter Fund REITs, Union Home REITs, UPDC REITs and UACN properties. Data for the study were collected from the databases of the securitized real estate companies covering the study period. The data collected comprised of share prices and dividends of the respective companies as well as inflation rates obtained from the Nigerian Bureau of Statistics (NBS). The data were analyzed by means of both descriptive statistical tools such as frequencies, mean scores and percentages; and inferential statistical tools such as correlation and regression models. The study revealed that the inflation-hedging performance of securitized real estate in Nigeria provided a partial hedge against inflation (with beta 0.071). It was recommended that real estate investors consider including REITs in their investment portfolios to so as to protect their investment funds from erosion by inflation.

Keywords: Inflation; Investment; real estate; Returns; Volatility (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2019-01-01
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