Residential Real Estate Investment Trusts in Japan (residential J-REITs) have become an increasingly significant listed property sector recently. The purpose of this paper is to assess the effectiveness of residential J-REITs in a mixed-asset portfolio context in Japan by assessing the significance, risk-adjusted performance and portfolio diversification benefits of residential J-REITs over July 2006-August 2018. The findings showed that residential J-REITs generally delivered superior risk-adjusted returns compared with the other sub-sector J-REITs, stocks and bonds in Japan over July 2006-August 2018, with desirable portfolio diversification benefits in the full mixed-asset portfolio context. Importantly, residential J-REITs are observed as strongly contributing to the mixed-asset portfolio context in Japan across the portfolio risk spectrum, particularly in a post-GFC context. This indicates that residential J-REITs are effective and liquid residential property investment exposure in Japan. This also confirms the effectiveness of institutionalised residential J-REITs. Given the solid residential property market fundamentals in Japan, an increased level of the institutionalisation of residential J-REITs can be expected.
Lin, Robbie, Chyi Lin Lee, and Graeme Newell. "The significance of Residential REITs in Japan as an Institutionalized property sector." In 26th Annual European Real Estate Society Conference. ERES: Conference. Cergy-Pontoise, France, 2019.
Section: Real Estate Finance and Investment