Assessment of Inflation and Exchange Rate Hedge Attributes of Listed Property Assets in Africa

Inflation and exchange rates are key macroeconomic indicators that affect the economic growth and development of every country. The importance of these indicators cannot be overemphasised in determining the Gross Domestic Product (GDP) of all sectors in a country. This study analyses the inflation and exchange rate hedge attributes of Africa-listed real estate properties which include, Nigeria, South Africa, and Egypt. The paper aimed to examine the risk-return characteristics of listed indirect real estate assets to determine the effects of macroeconomic factors such as inflation and exchange rates on the assets. Secondary data was used between the period of year 2008 to 2023.  The study utilized quantitative data analysis such as holding period returns, trend lines, percentage changes, unit root tests, and cointegration tests. The F-bound cointegration results indicate that Nigeria-listed property assets provide a hedge against exchange rate risk in the long run but not against inflation rate risk.  Furthermore, it shows that Egypt's listed property assets have a statistically significant long-run hedge against exchange rate and inflation rate movements. Also, it indicates that South Africa-listed property assets display a long-term hedge against exchange rate movements but not against inflation. The study concluded that Nigeria and South Africa-listed property assets offer long-run hedging benefits against exchange rate risk. However, Egypt-listed property assets provide statistically significant long-term hedges both against exchange and inflation rate risk. The study therefore recommends that investors should consider Egypt-listed property assets for long-run hedging against both exchange and inflation rates risk.