ABSTRACT
In recent years, a small number of researchers have adopted regressional analysis in levels between direct real estate investment performance and real estate company shares. Although the results challenge the early perception or judgement that the performance of real estate has little relationship with that of other financial market investments, and thus cannot be explained by or predicted via the latter, the results are somewhat mixed. This type of approach is motivated by the search for an easy way to describe and explain real estate performance and real estate market behaviour in the absence of reliable transaction-driven market data. However, analysis has been restricted to the stock market arena. There are no reasons, nor evidence, to support the idea that real estate company shares should necessarily behave similar to real estate. First, the investment undertaken by real estate companies rather small portion of total investment in commercial real estate. Second, real estate companies’ assets are geared which, along with company management, accounting policies and taxation, would cause a big variation in performance. And third, real estate investment, though a financial investment as well, is by little means a stock market bustle; rather, it is more interacted with the economic activities in the real sectors.
