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Title: Industrial real estate investment: Does the contrarian strategy work?
Authors: Addae-Dapaah, K. 
Webb, J.R.
Ho, K.H.D. 
Tan, Y.F.
Keywords: Contrarian investment strategy
Growth properties
Means reversion
Stochastic dominance
Value properties
Value-growth spread
Issue Date: 2010
Citation: Addae-Dapaah, K., Webb, J.R., Ho, K.H.D., Tan, Y.F. (2010). Industrial real estate investment: Does the contrarian strategy work?. Journal of Real Estate Finance and Economics 41 (2) : 193-227. ScholarBank@NUS Repository.
Abstract: The superiority of the contrarian investment strategy, though well attested to in the finance literature, has received scant attention, if any, in the real estate literature. This study uses empirical industrial real estate investment return data from 1985Q1 to 2005Q3 for the US, and some Asia Pacific cities in order to ascertain the relative superiority of "value" and "growth" industrial real estate investments. The results show that "value" industrial property investment outperformed "growth" industrial property investment in all the holding periods under consideration. Furthermore the industrial property investments exhibit return reversal. This implies that the superiority of the contrarian strategy is sustainable. The results of stochastic dominance tests validate the relative superiority of "value" over "growth" industrial property investment. This implies that fund managers who traditionally have been favoring prime (i.e. growth) industrial property investment may have to reconsider their investment strategy if they want to maximize their return. © 2008 Springer Science+Business Media, LLC.
Source Title: Journal of Real Estate Finance and Economics
ISSN: 08955638
DOI: 10.1007/s11146-008-9147-x
Appears in Collections:Staff Publications

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