The Performance and Diversification Potential of Non-Listed Value-Add Real Estate Funds in Japan

Martin Hoesli, Graeme Newell, Muhammad Jufri Bin Marzuki and Rose Neng Lai
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Martin Hoesli: Geneva School of Economics and Management, University of Geneva, 1211 Geneva, Switzerland
Graeme Newell: School of Business, Western Sydney University, Locked Bag 1797, Penrith, NSW 2751, Australia
Muhammad Jufri Bin Marzuki: School of Business, Western Sydney University, Locked Bag 1797, Penrith, NSW 2751, Australia

JRFM, 2022, vol. 15, issue 5, 1-16

Abstract: In the aftermath of the COVID-19 pandemic, non-core investments are gaining traction amongst institutional investors due to the shifting preference towards investment vehicles that position higher on the risk–return curve. Non-listed value-add real estate funds in Japan are one such vehicle. This research develops a comprehensive bespoke benchmark total return index using the ANREV database to reflect the performance of Japan-focussed non-listed value-add real estate funds. We compare the performance of such funds with that of other asset classes and perform portfolio and regression analyses. We conclude that there are several advantages to investing in those funds, including: (1) strong absolute total return performance, (2) competitive risk-adjusted performance, and (3) significant portfolio diversification potential in a mixed-asset portfolio context. The strategic implications for real estate investors are also assessed.

Keywords: non-listed real estate fund; value-add real estate fund; Japan; risk-adjusted performance; real estate investment strategy (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
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