Integration between real estate equity and non-real estate equity

Abel Olaleye, Benjamin Ekemode

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


Purpose: The paper examined the long-run relationship between real estate equity (property listed stock) and non-real estate equity (common stock) in the Nigerian capital market and established the integration between the investments. The paper aims to discuss these issues. Design/methodology/approach: The data collected comprised quarterly returns on property listed stock and All Share Index for the period of January 1999-December 2011. The calculated quarterly returns of the investments were subjected to the Philip-Person unit root test after which the integration between the investments was analysed using the Johansson integration test. Findings: The results showed that real estate equity performed better the non-real estate equity but with corresponding higher risk level. Also, real estate equity had a slightly lower performance when compared with non-real estate equity on return/risk ratio basis. The findings showed that property listed stock (real estate equity) was integrated with common stock or non-real estate equity and suggest that the Nigerian listed property stock, by nature, was similar to REITs. This result negates the belief that property listed stock's returns are integrated with direct real estate market and are often influenced by the returns of the underlying direct real estate assets. Practical implications: The paper implied that while investors could consider investing in real estate equity and earn better return than investing in common equity in the Nigerian capital market, the inclusion of both in a domestic portfolio could be expected to bring little or no diversification benefit. Originality/value: The paper is one of the few attempts at assessing the long-run relationship between property listed stock as a form of real estate equity and non-real estate equity and especially from African emerging market perspective.

Original languageEnglish
Pages (from-to)244-255
Number of pages12
JournalJournal of Property Investment and Finance
Issue number3
Publication statusPublished - Apr 2014
Externally publishedYes


  • Integration test
  • Nigerian capital market
  • Non-real estate equity
  • Real estate equity
  • Return/risk level

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Finance
  • Economics, Econometrics and Finance (all)


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