A comparative study of return on investment for REITs and Property Fund in Thailand

Abstract

The objective of this research was to study and compare rates of return on investments of 18 Property Funds (Type 1 Fund) operating from April 1, 2009 to December 31, 2015 and 5 Real Estate Investment Trusts (REIT) operating from October 1, 2014. This study used average closed price and average net asset value per unit to evaluate the rates of return on investments throughout the Property Fund. The results showed as follows; Property Funds mostly yielded below average SET return and Property & Construction Industry Group return over 7-year period. However, the risks of Property Funds were lower than that of SET and Property & Construction Industry. Moreover, throughout 2015, average rate of return for all REITs outperformed SET return and Property & Construction Industry return. In terms of risk, REITs mostly had lower standard deviation than SET and Property & Construction Industry. In contrast, REITs mostly had higher coefficient of variance than SET and Property & Construction Industry. The evaluation of rates of return on investments throughout the Property Fund revealed that Property Fund investing in residential and housing yielded the highest return compared to other funds.