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Corporate focus, residential assets, and the performance of French REITs

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  • Kevin Beaubrun‐Diant
  • Tristan‐Pierre Maury

Abstract

This paper raises the question of the specific impact of the share of residential assets on the performance of real estate investment trusts (REITs). In the literature, many articles questioning the importance of the nature of assets held in general (and residential assets in particular) do not take the level of diversification of REITs into account. We incorporate this factor into our analysis and integrate our measure of the effects of residential assets in a framework controlling for the impact of the diversification of the type of real estate assets held. Based on French data, we question whether REITs holding residential assets perform better than REITs holding little or no residential assets for a given level of diversification. We do not detect any significant diversification effect on the performances of French REITs. We also test the impact of asset diversification on REITs market volatility. We provide some evidence that firms with strongly concentrated balance sheets are more volatile than diversified firms, but this effect is weaker for REITs holding mostly residential rather than other types of assets.

Suggested Citation

  • Kevin Beaubrun‐Diant & Tristan‐Pierre Maury, 2022. "Corporate focus, residential assets, and the performance of French REITs," Bulletin of Economic Research, Wiley Blackwell, vol. 74(2), pages 599-621, April.
    • Handle: RePEc:bla:buecrs:v:74:y:2022:i:2:p:599-621
    DOI: 10.1111/boer.12311
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    References listed on IDEAS

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    1. Dennis R. Capozza & Paul J. Seguin, 1999. "Focus, Transparency and Value: The REIT Evidence," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(4), pages 587-619, December.
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    9. John D. Benjamin & Peter Chinloy & William G. Hardin III, 2007. "Institutional-Grade Properties: Performance and Ownership," Journal of Real Estate Research, American Real Estate Society, vol. 29(3), pages 219-240.
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