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Thesis (MBA)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: In this study investors were informed of the benefits of diversification and the reduction of systematic risk when property is included in an asset allocation portfolio. It also provided investors with information that will assist them in deciding on asset class allocations, specifically including real estate within a mixed-asset portfolio for both the short and long term. The method applied to answer the research questions started with a detailed literature review in order to gain a thorough understanding of the topic. The second part involved a quantitative approach. The South African Property Index (SAPI), All Share Index (ALSI) and All Bond Index (ALBI) total returns were analysed using descriptive statistics in order to gain knowledge about the return (mean) and risk (standard deviation) performances of the three asset data series. The final part analysed the allocation weights of assets in a mixed portfolio to determine the optimal portfolio weights to either reduce risk or enhance returns. It was found for the period under review that property quarterly returns outperformed equity and bonds. The compound annual growth rate for the period was calculated and it was found that property had a growth rate of 26.1 per cent, equity a growth rate of 17.9 per cent and bonds a growth rate of 10.9 per cent. The risk rate for property was also determined and it was higher than for equity and bonds. The study also found a correlation between bonds and properties, meaning that adding bonds to a real estate portfolio would not give much diversification benefit. Equity to bonds had a negative correlation, showing diversification benefits of adding bonds to an equity portfolio. However, equity to property had a low correlation, meaning that adding property to an equity portfolio would reduce portfolio risk and increase returns. Should an investor not want to be exposed to more risk than simply holding one asset, namely bonds, a portfolio gives substantially higher returns without increasing the risk The study also observed the changes in the asset class returns during certain economic activities. Bonds were found to be the most resistant of the three asset classes and equity the most affected.

published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy

M.Com. / The potential investor in real estate is often confronted with a selection of properties in which he can invest. Each of these investments involves an expected rate of return and a risk that can be expressed in relation to each other. This relationship, known as the risk profile, differs from investment to investment and is therefore unique to a particular investment. The expected rate of return on an investment in real estate depends on the total expected tenant income less operating expenditures. Furthermore, the expected rate of return is influenced by the choice of capital structure. To be efficient, the capital structure must combine own as well as borrowed capital. Expected gross tenant income increases from year to year in terms of the escalation clause. The market average discount rate, at which income is discounted, does not necessarily have to differ from year to year. Consequently. a higher income could lead to a higher discounted value. The risk of investing in real estate is influenced by various factors such as location, interest rates, mass opinion, tenant mix and operating risk...

On 1 May 2013, real estate investment trusts (REITs), a listed property product, had legislation about it introduced in the South African property market. Prior to the introduction of this REIT legislation, property unit trusts (PUTs) and property loan stocks (PLSs) were the two predominant types of listed property investment products in South Africa. However, both the PUT and PLS are subject to uneven regulation and taxation, and they lack flexibility. The REIT legislation was introduced to eliminate some of the problems of the PUTs and PLSs, by creating: a more unified tax treatment of listed property companies, more stringent regulatory requirements and uplifting the South African property market to a level that is internationally competitive. It is therefore considered valuable to empirically investigate whether or not the introduction of the REIT framework into the listed South African property market will be advantageous to investors, and whether or not it would lead to improvement in the efficiency, regulation and taxation of the listed property market. A questionnaire was used to collect primary data to analyze the research problem. The questionnaire used a Likert scale format that consisted of 20 questions. There were a total of 58 useable respondents, each of who fell into 1 of 5 occupational categories. The questions were divided into 4 unifying themes and the findings were analyzed according to these themes. From the analysis of the responses it was found that the REIT legislation is perceived as a welcomed and suitable introduction to the South African listed property market. We could also infer that REITs allow for a more favorable tax dispensation, improved regulation, increased international competitiveness and enhanced liquidity within the listed property market. Overall, there is a perception that investors, especially fund managers, would find it potentially advantageous to include South African REITs or a higher proportion of such REITs in their investment portfolios.

The aim of this thesis is to analyse if the euro has had any significant effect on the inflow of foreign direct investments. Our purpose is answered by developing an econometric model with inflow of foreign direct investments as the dependent variable. The model is estimated with the ordinary least squares method and panel data from ten different countries, five which have adopted the euro as their currency and five which have not. The data collected concerns the timeframe from 1994 to 2007. The theoretical background is retrieved mainly from journal articles that have conducted similar research of how a common currency has affected foreign direct investments. We use these studies as a base for developing our regression model and also as a foundation for our analysis. The results from this thesis show that the euro has had a large significant effect on foreign direct investments which we see by analysing the interaction variable in our regression. Furthermore, the results show that trade openness and GDP have the largest significant effect on FDI, meanwhile unit labour cost and exchange rate volatility had no significant effect at all. We conclude that the euro has a positive significant effect on inward foreign direct investment. Although the model suggests that having adopted the euro in 1999 would yield a 58.4 per cent increase in inward FDI compared to countries that kept their own currency, we are uncertain of the effect’s actual magnitude due to concern that we read some effects from the single market in the variable we use to estimate the euro’s effect.

As the investment treaty arbitration regime matures, consensus is emerging as to the need for public interest considerations to be taken into account in resolving disputes under international investment agreements (IIAs). However, the question of how such considerations should be reflected remains contentious. This thesis proposes that the remedies stage of the process can, and should, play a role in taking account of public interest considerations and so in easing the tension between host state regulatory sovereignty and investment protection that lies at the heart of the investment treaty regime. Thus, this thesis argues that, while, on the one hand, there is a need to introduce an element of reciprocity into the investment treaty arbitration process in order to ensure continuing state co-operation and to reflect the broader underlying purposes of IIAs, on the other, the primary object of the system remains the protection of foreign investors. These competing imperatives can lead to difficulties in taking account of public interest considerations at the merits stage of the arbitration process. Therefore, in order to reconcile these competing imperatives and to achieve an optimal balance between host state regulatory sovereignty and investment protection, this thesis proposes that public interest considerations should be recognised at the remedies stage where such considerations cannot be taken into account either sufficiently or at all at the merits stage and identifies a number of situations in which this approach would be appropriate. Potential doctrinal bases for implementation of this approach are also examined and the conclusion reached that, given the significant degree of discretion afforded to tribunals in applying the full reparation principle and the role that equity can permissibly play in quantifying damages, this approach can, save in the case of lawful expropriations, be implemented within the parameters of existing legal principles.

This thesis proposes that conscious and increased co-operation and coordination of the relationship between investment tribunals and domestic courts can greatly improve the efficacy of the international investment arbitration system, and further the rule of law. The extent of the power both forums wield, the level of influence both systems have on each other and the critical roles both systems play in the resolution of investment disputes warrant a systematic approach to cooperation and coordination. This study finds justification for this proposition by analyzing the policy implications of investment arbitration outcomes. It goes on to explore the relationship between domestic courts and investment tribunals by examining the roles they play and the areas of jurisdictional friction between the two systems. The core issues addressed include the jurisdiction and competence of international investment tribunals and domestic courts in the resolution of investment disputes; the support roles of domestic courts; anti-suit/anti-arbitration injunctions; pre-conditions to arbitration; the effects and implications of the review of investment tribunals’ decisions by domestic courts, and the review of the lawfulness of the conduct of domestic judicial systems by investment arbitration tribunals. In addressing these issues, the work examines the extent to which domestic courts and international arbitration tribunals should accord deference to each other with respect to their involvement in the resolution of investment disputes. Based on the analysis of the areas of intersection between the domestic and international investment dispute settlement systems, instances of ‘positive interactions’ are highlighted and encouraged. The study also proposes ways in which further cooperation and coordination can take place. In making these proposals, and acknowledging the differences that exist, this thesis considers the collaboration between other international adjudicatory bodies and domestic courts so as to distill lessons for the international investment arbitration system.

In modern organisations a large portion of senior management's time is now being consumed in finding ways to measure the contribution of their organisations' IS/IT investments on business performance. It has been shown that IS/IT investments in many organisations are huge and increasing rapidly every year and yet there is still a lack of understanding of the impact of the proper IS/IT investment evaluation processes and practices in these organisations. At the same time, the issue of expected and actual benefits realised from IS/IT investments has generated a significant amount of debate in the IS/IT literature amongst the researchers and practitioners. This is as true in Australia as it is in the rest of the developed world. Thus, one can argue that a detailed study of current practice in IS/IT investment evaluation in Australia is warranted. In this research study, an attempt was made to: (1) establish current Australian industry and government practices and norms in managing IS/IT benefits and evaluation; and (2) develop a framework based on the fit between theory and practice of IS/IT investment evaluation by large Australian organisations, particularly in an environment where much of the IS/IT is outsourced. Research objective one utilised an existing questionnaire based on Ward et al. (1996). This questionnaire was sent to the IS/IT managers of the largest 500 Australian organisations. The aim of this objective was to investigate IS/IT investment evaluation and benefits management and realisation in these Australian organisations, so as to shed light on the current practices and norms in this area. / The second research objective employed two case studies utilising semi-structured interviews, observation and document review. The aim of this objective was to develop a framework based on the fit between theory and practice of IS/IT investment evaluation by large Australian organisations. Results from the survey and two case studies were analysed and a framework for benefits realisation and investment evaluation was developed. The major contribution of this research include first, the creation of several useful guidelines for large outsourcing organisations undertaking IS/IT investment evaluation and benefits realisation processes and second, the development of a benefits realisation and investment evaluation framework which offers a practical tool to help the large organisations to determine when and how the IS/IT investment evaluation and benefits realisation should be adopted.

This research project examines the investment performance of Hong Kong?s real estate and property stocks over a period of nineteen years from 1984 to 2002. Evaluations using time-varying Jensen index adjust the asset return comparison for possible time-varying investment risk (return variation). The return and risk comparison for direct and indirect real estate investment is further investigated with an alternative GARCH-M model in capturing the possible time-varying risk premium. Unlike previous studies, one of the major contributions of this research is to measure the risk-adjusted real estate returns by taking into account the impact of illiquidity, management and transaction costs, and vacancy risk with actual transaction data. The time-varying models have not been applied for analysing the returns on property investment in Hong Kong so far. The results of this study help resolving the puzzle why real estate offers superior investment performance as stated in the existing literature that is inconsistent with the Efficient Market Hypothesis. With arbitrage, the capital theory predicts that all investments should display similar risk adjusted return in the long run. As a result, it is impossible for direct property to earn abnormal risk adjusted return in the long run. The empirical results show that superiority of real estate property in risk-adjusted return is reduced or even disappeared in the period of 1991 to 2002 when the impact of illiquidity and the 1997 Asian Financial Crisis are taken into account. This conclusion is further strengthened with the favourable empirical evidence obtained when all the unsystematic risks including the management and transaction costs, and vacancy risk are incorporated into the analysis. The superior investment performance for real estate relative to property stocks found in the literature is too good to be true. Its existence is simply due to the omission of fundamentals factors like unsystematic risks in the analysis. The impact of liquidity on return assessment has been under-researched, this study attempts to fill the gap by quantifying the impact of liquidity explicitly in explaining the excess return of real estate investment. The empirical result is consistent with the intuition that investors require compensation in holding illiquid assets.