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Implications of investors’ heterogeneity for the commercial real estate market – an analysis of the UK market

Zhang, F. (2020) Implications of investors’ heterogeneity for the commercial real estate market – an analysis of the UK market. PhD thesis, University of Reading

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To link to this item DOI: 10.48683/1926.00093789


This doctoral research discusses the behaviours of heterogeneous investors – specifically, the investors from different foreign countries or markets who have different levels of market knowledge and market access – in the host private commercial real estate (CRE) market. This research analyses the partnering strategies of heterogeneous investors under the influence of existing peer investors in the market, and influences of the local market strategies – brokerage, local advantage, market experience and strategic alliance forms – to the price paid for CRE acquisition. Regarding the impacts of the heterogeneous investor group to the market, this research also investigates the influence of investor group with more diversified nationality backgrounds on CRE market operation, specifically transaction liquidity. The study adopts related theories and empirical practice in international business, corporate governance, market bargaining and social network analysis to enhance the discussion of commercial real estate investment. With analysis of CRE transactions in London, Manchester, Liverpool, Midlands and Northern England from 2001 to 2015, the research finds that – 1. Partnering choices of investors are affected by the existing peer groups in the host market; 2. Apart from the local market advantage and market experiences, forming joint venture partnerships help investor improve market bargaining power and gain a pricing premium; 3. The involvement of foreign investors improve the CRE market liquidity although their initial activities trigger the price fluctuations. On the other hand, the efficient connectedness among the market participants with different home countries and capital types are the crucial market attributes to enhance the market liquidity. With the research findings, the study aims to introduce the topics and methods in international business strategy and social network analysis into real estate studies. While the global real estate investment flows have been increasing, there is lack of discussion on the investment strategies of foreign investors in the opaque host CRE market; this doctoral study fills this gap with discussions and empirical evidence. Moreover, change to the market participants in the host CRE market affect market operation and market depth in the long term; accordingly, both investors and regulatory parties need to be aware of the change of the market. This doctoral research aims to provide practical implications with effective monitoring methods to the study of investment market structure and financial stability. Chapter 1 introduces the research motivations, research questions and main findings. In the following three chapters, the research investigates the topics of foreign investors’ strategic VIII alliance, property deal pricing and transaction network respectively. These chapters discuss the questions from transaction microstructure to market structure. The three chapters are also independent research papers. Chapter 5 summarises the findings of the three studies, evaluates the research implications and discuss the potential for further research. Supplementary information and results are in the appendices.

Item Type:Thesis (PhD)
Thesis Supervisor:Devaney, S.
Thesis/Report Department:Henley Business School
Identification Number/DOI:
Divisions:Henley Business School > Real Estate and Planning
ID Code:93789


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