Sensitivity of Real Estate Investment Return to Market Return Index: The Case of Nigerian Real Estate Investment Trusts

Adilieme Chibuikem () and Umeh Obinna ()
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Adilieme Chibuikem: University of Lagos, Lagos, Nigeria
Umeh Obinna: University of Lagos, Lagos, Nigeria

Baltic Journal of Real Estate Economics and Construction Management, 2020, vol. 8, issue 1, 197-207

Abstract: The level of sensitivity of every investment option to a market index is crucial to investors. Sensitivity analysis of individual or a set of returns on investments to market return index predicts the reaction of the investment(s) to changes in the market index; informs investors of prospective performance of different investments types; as well as assists the investors in making appropriate decisions on investment selections. This paper assessed how sensitive indirect real estate investments in Nigeria were to market index. The three companies whose asset returns were considered in this study were real estate investment trusts listed in the Nigerian Stock Exchange. The data used in this study were sourced from annual reports of the listed companies, and reports of the Nigerian Stock Exchange. The beta coefficients were used to determine the sensitivity of the selected stocks to market return index. The study found a very low and insignificant beta coefficient among various real estate investments and market return index. Hence, there is no relationship between the market return index and the returns on the Real Estate Investment Trusts listed in the Nigerian Stock Exchange.

Keywords: Market index; real estate investment; real estate investment trusts; returns; sensitivity analysis (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:bjrecm:v:8:y:2020:i:1:p:197-207:n:14

DOI: 10.2478/bjreecm-2020-0014

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