Articles:
Performance of Canadian
E-REITs
Authors: Lawrence
Kryzanowski and Margarita Tcherednitchenko
Start Page: 1
End Page: 22
Volume: 10
Issue Number: 2
Year: 2007
Publication: International Real Estate Review
Abstract:
The return performance and factor
sensitivities of Canadian equity real estate investment trusts (E-REITs) are
examined. Today, typical and average Canadian E-REIT IPOs are correctly
priced based on first-day and subsequent short-run returns. The overpricing
evident earlier in the 1993-96
period for typical and average E-REIT IPOs has corrected. E-REITs are equity
investments with about one-half the market risk, and greater sensitivity to
interest-rate changes, than the S&P/TSX Composite Index. E-REITs
outperformed the S&P/TSX Composite over the 1996-2004 period on a return,
risk, and market- and/or risk-adjusted basis. Thus, E-REITs provided
material diversification benefits with no sacrifice in return, when added to
a common stock portfolio during the studied period.
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