Institutional investors have typically involved commercial property in their core portfolios for stable and income-oriented returns, particularly concentrated on low-risk traditional property sectors including office, retail and industrial property. Recent years have seen the strong growth in demand for quality commercial properties resulting in an imbalanced property investment market, with significant capital flows available (eg: growth in superannuation fund assets) for property investment from this increased appetite for commercial property. This has also been driven by some basic factors such as changing demographics. The demographic change has affected savings, investment and capital flows as the elderly prefer investments with the characteristics of higher yield and stability. Due to the ageing population, a compulsory superannuation system was introduced by the Australian government in 1992 which has driven significant increased capital flowing into investment markets. Since the increased capital flowed into investment markets with significantly compressed property yields, institutional investors have considered a range of emerging property sector investments such as self-storage, retirement, healthcare, and leisure properties to enhance the performance and provide diversification benefits in their portfolios. Specifically, recent years have also seen infrastructure emerge as a separate asset class for institutional capital, with the infrastructure asset class having distinctive characteristics and attractive features; particularly in a climate of significantly reduced government spending on infrastructure in most countries, as governments seek alternative funding options for infrastructure development and maintenance. However, only limited studies regarding the performance of the emerging property sectors and infrastructure investments have been conducted. As such, this PhD thesis focuses on both quantitative and qualitative aspects of the investment issues for the emerging property sectors and infrastructure. To provide a fuller view of the emerging property sectors and infrastructure, the empirical analysis in this thesis provided the performance assessments of Australian emerging property sector LPTs, US non-traditional REITs, UK direct leisure property, Australian infrastructure, US infrastructure and European infrastructure, as well as the strategic investment issues regarding emerging property sector and infrastructure investment via surveys with Australian emerging property sector LPT and infrastructure fund managers. With the development of an emerging property sector LPT index, the results of the empirical analysis indicate Australian emerging properties are characterised as higher risk-higher return property investments. The diversification benefit has been confirmed as adding emerging properties to an investment portfolio. The emerging property sector LPT fund managers’ survey has found new product diversity, strong performance, enhanced yield, greater choice of property and significant capital inflow available for property as the essential motivating factors for emerging property sector investment; whilst the quality and availability of data, the competition of emerging property investments/acquisitions, the depth of market and identifying reliable/strategic business partners, and the policy and regulation issues have been identified as the most significant risks in emerging property sector investment. For US non-traditional REIT analysis, self-storage REITs presented strong performance over the study period. The efficient frontier of portfolios consisting of self-storage REITs also presented enhanced efficiency, while healthcare and specialty REIT portfolios showed less significant efficiency. Due to no equivalent public emerging property series being available for UK, a direct leisure property total return series is obtained from IPD as the proxy of leisure property investment performance. Leisure property outperformed the other property sectors, as well as the other asset classes over the 26-year period to 2006. Similarly, the findings of the property portfolio and mixed-asset portfolio analyses suggest that adding leisure property to the UK property portfolios or mixed-asset portfolios has resulted in significant diversification gains. The findings of the infrastructure analyses have shown the consistent results of enhanced returns, lower risk and significantly improved diversification benefits by infrastructure investments over the three major infrastructure markets including Australia, US and Europe. With the rapidly expanding market in recent years, the strong performance and volatility of infrastructure investment has been moderate when the infrastructure markets are maturing. The Australian infrastructure fund managers’ survey has found stable cash flows, long duration, greater understanding of infrastructure, monopoly characteristics, inflation hedging and diversification benefits as the essential motivating factors for infrastructure investment; whilst infrastructure policy and over-valued infrastructure have been identified as the most significant risks in infrastructure investment. As the emerging property sectors and infrastructure are maturing as effective and significant investment vehicles in Australia and internationally, the issues assessed in this thesis taking on increased significance in the future. It is clearly evident that the property and infrastructure research in this thesis has lead to the enhanced understanding of alternative property and property-related assets and a fuller understanding of the investment dynamics of the emerging property sectors and infrastructure. / Doctor of Philosophy (PhD)
| Identifer | oai:union.ndltd.org:ADTP/235673 |
| Date | January 2008 |
| Creators | Peng, Hsu Wen, University of Western Sydney, College of Business, School of Economics and Finance |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
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