Identification of macroeconomic factors on excessive returns: a literature review

Abstract

Asian REITs could be considered as one of the fastest growing assets in the world. Japan is currently the biggest market in Asia and Asian REITs market is very much progressing to expand with the emerging of two major regional economies, China and India. Previous studies have proved that Asian REITs are able to show competitive advantage in most of mixed-asset scenarios and have significant roles in improving efficient global REITs portfolio returns. Previous findings also have shown that REITs are able to give remarkable return compare to other asset classes. Similar with other type of portfolio investment, REITs also have high interaction with macroeconomic factors such as inflation and interest rate which represent the economic situation of the countries. The excessive return is used to measure the performance that is affected by the macroeconomic factors by setting a benchmark which will give an added value to the portfolio. Hence, the aim of this research is to review on the literature of the macroeconomic factors on excessive returns Asian REITs.