COMMERCIAL REAL ESTATE PRICES IN MALAYSIA AND COVID-19
DOI:
https://doi.org/10.21837/pm.v21i27.1284Keywords:
Commercial, Real Estate, Price, Covid-19, MalaysiaAbstract
The consequences of the coronavirus disease 2019 (COVID-19) pandemic on commercial real estate pricing are examined in this article, with a focus on the Malaysian market. It begins by pointing out certain cautions to keep in mind while using direct real estate indices. The authors then look at how commercial real estate prices changed during the epidemic, highlighting disparities between property kinds. This study uses data from both direct and listed real estate to achieve this goal and goes on to explore changes in the primary elements driving commercial real estate pricing. The essay then moves on to the expected future trajectory of commercial real estate values. Retail and hospitality assets, as well as, to a lesser extent, office buildings, were shown to be the most affected by the findings.
Downloads
References
Akinsomi, Omokolade. 2020. How resilient are REITs to a pandemic? The COVID-19 effect. Journal of Property Investment & Finance 39: 19–24. DOI: https://doi.org/10.1108/JPIF-06-2020-0065
Alfaro, Laura, Anusha Chari, Andrew N. Greenland, and Peter K. Schott. 2020. Aggregate and Firm-Level Stock Returns during Pandemics, in Real Time. NBER Working Paper Series No. 26950. Available online: http://www.nber.org/papers/w26095 (accessed on 11 September 2020). DOI: https://doi.org/10.3386/w26950
Campbell, J. Y., & Shiller, R. J. (1989). The dividend ratio model and small sample bias: a Monte Carlo study. Economics letters, 29(4), 325-331. DOI: https://doi.org/10.1016/0165-1765(89)90211-5
Chen, Chen, Sudipto Dasgupta, Thanh Huynh, and Ying Xia. 2020. Were Stay-at-Home Orders during the COVID-19 Harmful for
Business?—The Market’s View. Working Paper. Hong Kong: Monash University, and Chinese University of Hong Kong.
D’Lima, Walter, Luis A. Lopez, and Archana Pradhan. 2020. COVID-19 and Housing Market Effects: Evidence from U.S. Shutdown Orders. Working Paper. Norfolk: Old Dominion University.
Deghi, A., Mok, J., & Tsuruga, T. (2021). Commercial Real Estate and Macrofinancial Stability During COVID-19. IMF Working Papers, 2021(264). DOI: https://doi.org/10.5089/9781557759764.001
Delfim, J.-C. and Hoesli, M. (2021), “Robust desmoothed real estate returns”, Real Estate Economics, Vol. 49 No. 1, pp. 75-105. DOI: https://doi.org/10.1111/1540-6229.12313
De Vito, Antonio, and Juan-Pedro Gomez. 2020. Estimating the COVID-19 cash crunch: Global evidence and policy. Journal of Accounting and Public Policy 39: 1–14 DOI: https://doi.org/10.1016/j.jaccpubpol.2020.106741
Ding, W., Levine, R., Lin, C., Xie, W.: Corporate immunity to the COVID-19 pandemic. Working paper, National Bureau of Economic Research (2020) DOI: https://doi.org/10.3386/w27055
Duca, J.V. and Ling, D.C. (2020), “The other (commercial) real estate boom and bust: the effects of risk premia and regulatory capital arbitrage”, Journal of Banking and Finance, Vol. 112, 105317 DOI: https://doi.org/10.1016/j.jbankfin.2018.03.006
Falkenbach, H. and Hoesli, M. (2017), “Real estate investing: opportunities and challenges”, Bankers, Markets and Investors, Vol. 148, pp. 3-16.
Gerding, Felix, Thorsten Martin, and Florian Nagler. 2020. Sovereign Debt and Equity Returns in the Face of Disaster. Working Paper. Milan: Bocconi University.
Hoesli, M., Lekander, J. and Witkiewicz, W. (2004), “International evidence on real estate as a portfolio diversifier”, Journal of Real Estate Research, Vol. 26 No. 2, pp. 161-206. DOI: https://doi.org/10.1080/10835547.2004.12091136
Lee, K. Y. M., Jais, M., & Chan, C. W. (2020). Impact of covid-19: Evidence from malaysian stock market. International Journal of Business and Society, 21(2), 607-628. DOI: https://doi.org/10.33736/ijbs.3274.2020
Ling, D.C., Wang, C. and Zhou, T. (2020), “A first look at the impact of Covid-19 on commercial real estate prices: asset-level evidence”, Review of Asset Pricing Studies, Vol. 10 No. 4, pp. 669-704. DOI: https://doi.org/10.1093/rapstu/raaa014
MacKinnon, G.H. and Al Zaman, A. (2009), “Real estate for the long term: the effect of return predictability on long-horizon allocations”, Real Estate Economics, Vol. 37 No. 1, pp. 117-153. DOI: https://doi.org/10.1111/j.1540-6229.2009.00237.x
Megahed NA, Ghoneim EM (2020) Antivirus-built environment: Lessons learned from COVID-19 pandemic. Sustainable cities and society 61:102350 DOI: https://doi.org/10.1016/j.scs.2020.102350
Milcheva, Stanimira. 2020. Volatility and the Cross-Section of Real Estate Equity Returns during COVID-19. Working Paper. London: University College London. DOI: https://doi.org/10.2139/ssrn.3599211
Razali, M. N., Jalil, R. A., & Shayuti, A. F. (2021). Assessing the Impact of Outbreaks on Malaysian Listed Property Companies in Mixed-Asset Portfolios. Real Estate Management and Valuation, 29(3), 87-93. DOI: https://doi.org/10.2478/remav-2021-0024
Schoenfeld, Jordan. 2020. The Invisible Risk: Pandemics and the Financial Markets. Working Paper. Hanover: Dartmouth College. DOI: https://doi.org/10.2139/ssrn.3567249
Shah AUM et al (2020) COVID-19 outbreak in Malaysia: actions taken by the Malaysian government. International Journal of Infectious Diseases 97:108–116 DOI: https://doi.org/10.1016/j.ijid.2020.05.093
UNWTO (2020), World Tourism Barometer, August/September, Vol. 18 No. 5, World Tourism Organization, Madrid.
Van Dijk, D., Kinsella Thomson, A. and Geltner, D. (2020), “Recent drops in market liquidity may foreshadow major drops in US commercial real estate markets”, Working Paper, SSRN, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id53604606.
Xie, L. and Milcheva, S. (2020), “Proximity to Covid-19 cases and real estate equity returns”, Working Paper, SSRN, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id53641268. DOI: https://doi.org/10.2139/ssrn.3641268
Van Dijk, Dorinth, Anne Kinsella Thompson, and David Geltner. 2020. COVID-19 Special Report: Recent Drops in Market Liquidity May Foreshadow Major Price Drops in U.S. Commercial Real Estate Markets. Cambridge: MIT Center for Real Estate. DOI: https://doi.org/10.2139/ssrn.3604606
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 Unported License.
Copyright & Creative Commons Licence
eISSN: 0128-0945 © Year. The Authors. Published for Malaysia Institute of Planners. This is an open-access article under the CC BY-NC-ND license.
The authors hold the copyright without restrictions and also retain publishing rights without restrictions.
