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Contrarian Real Estate Investment in Some Asia Pacific Cities

Addae‐Dapaah, K; Ho, KHD; Chua, YH; (2007) Contrarian Real Estate Investment in Some Asia Pacific Cities. Journal of Property Research , 24 (2) pp. 159-190. 10.1080/09599910701440156. Green open access

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Abstract

The profitability of contrarian investment strategy (i.e. investing in value stocks) is one of the most well‐established empirical facts in the finance literature. It would appear, however, that the strategy has not been extended to real estate. Thus, the paper examines the contrarian investment strategy in relation to real estate so as to ascertain the comparative advantage(s) (in terms of performance) of ‘value’ and ‘growth’ property investments. It is found, after a case study of 11 cities in the Asia‐Pacific over the period 1994Q2 through 2004Q2, that contrarian real estate investment consistently outperformed growth property investment. The results of stochastic dominance test validate the relative superiority of ‘value’ over ‘growth’ property investment. This implies that fund managers who traditionally have been favouring prime (i.e. growth) property investment may have to reconsider their investment strategy if they want to maximize their return.

Type: Article
Title: Contrarian Real Estate Investment in Some Asia Pacific Cities
Open access status: An open access version is available from UCL Discovery
DOI: 10.1080/09599910701440156
Publisher version: http://dx.doi.org/10.1080/09599910701440156
Language: English
Additional information: This is an Accepted Manuscript of an article published by Taylor & Francis in the Journal of Property Research on 9 August 2007, available online: http://www.tandfonline.com/10.1080/09599910701440156.
Keywords: Contrarian investment strategy, value‐growth spread, value properties, growth properties, stochastic dominance
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > The Bartlett School of Planning
URI: https://discovery.ucl.ac.uk/id/eprint/1530077
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