Investigations on the real estate market
Title: Investigations on the real estate market, what are the main factors influencing the performance of the French Real Estate Investments Trusts?Problem: In 2003, the French government implemented a new tax-exempt structure in the real estate market. Like REITs in the United States, SIICs are listed French companies that aim to improve the performance of real estate stocks on Paris Stock Exchange. The problem consists of determining the performance of the SIICs’ portfolio, identifying the major influences of economic factors and capturing financial behaviour in asset portfolio management.Purpose: Recently, the subprime crisis has largely brought out uncertainty of financial actors in the real estate sector. In this context, we try to apprehend the performance of these specificSIICs investment vehicles related to financial, economic and managerial influences, by quantifying their stock performance in a five-year time frame.Methodology: A deductive approach guides our thesis to emphasize our research question. Our business strategy entails positivism and objectivism considerations and relies on a case analysis research design using the multifactor model. Besides, the data collection process is following a quantitative approach of twenty chosen French SIICs between 2003 and 2007.Result / Conclusion: Even if the multifactor model used by the authors may be viewed as unspecified, useful results can still be extracted and analysed. The hotel & LDG sector slightly performs better than others depending on the strategy of investment and the state of economy. Long-term interest rate acts as the principal explanatory factor. Investors do not necessarily respond in favour of the general market confidence indicator.
Source Type:Master's Thesis
Keywords:french real estate investment trusts siic performance economic factors financial behaviour and multifactor model
Date of Publication:07/01/2008