Tenant Industry Sector and European Listed Real Estate Performance

Jan Muckenhaupt, Martin Hoesli, Bing Zhu* (Corresponding Author)

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper extends the empirical evidence on the relationship between the performance of public real estate companies (PRECs) and the industrial sector of their tenants. By investigating the performance of a large sample of European real estate firms from 2010 to 2019 and information pertaining to the firms’ tenants, we find that the systematic risk in the tenants’ industry sectors is capitalized in real estate company equity returns. Our results remain robust after correcting for stock beta modifications, tenant sector alpha, tenant anchor effects, and other tenant characteristics. We consider a hypothetical trading strategy that assumes a long position on PRECs whose occupier base is
dominated by tenants belonging to riskier sectors, while the trading strategy shortens PRECs whose tenants belong to less risky sectors. The adoption of this strategy yields benchmark-adjusted annual returns of 3.68%.
Original languageEnglish
Number of pages26
JournalJournal of Real Estate Research
Early online date18 May 2023
Publication statusE-pub ahead of print - 18 May 2023


  • Public Real Estate Companies
  • Listed Real Estate
  • Tenants
  • Industry Sector
  • Systematic Risk


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