Corporate Real Estate and Stock Market Performance (Revised)

21 Pages Posted: 25 Oct 2003

See all articles by Kim Hiang Liow

Kim Hiang Liow

National University of Singapore (NUS) - Department of Real Estate


An interesting question in corporate real estate literature is whether real estate can improve the stock market performance of "property-intensive" non-real estate firms. Using a data set comprising 75 non-real estate corporations that own at least 20% properties, this paper empirically assesses and compares the pair-wise return, total risk, systematic risk and Jensen abnormal return performance of "composite" (with real estate) and hypothetical "business" (without real estate) firms. We employed MSCI world equity index instead of a local market index to provide some insights into the performance of the local market relative to the "global" market during the 1997-2001 volatile periods experienced by many Asian countries. Our results suggest the inclusion of real estate in a corporate portfolio appears to be associated with lower return, higher total risk, higher systematic risk and poorer abnormal return performance. It is therefore likely that non-real estate firms own properties for other reasons in addition to seeking improvement in their stock market performance. Further research is needed to explore the main factors contributing to corporate real estate ownership by non-real estate firms.

Keywords: Corporate real estate, composite returns, business returns, stock market performance, Singapore

Suggested Citation

Liow, Kim Hiang, Corporate Real Estate and Stock Market Performance (Revised). Available at SSRN: or

Kim Hiang Liow (Contact Author)

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
65-8743420 (Phone)
65-7748684 (Fax)

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