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Individual Assets, Market Structure And The Drivers Of Return

Author

Listed:
  • Steven Devaney
  • Colin Lizieri

    (Department of Real Estate & Planning, University of Reading)

Abstract

Much prior research on the structure and performance of UK real estate portfolios has relied on aggregated measures for sector and region. For these groupings to have validity, the performance of individual properties within each group should be similar. This paper analyses a sample of 1,200 properties using multiple discriminant analysis and cluster analysis techniques. It is shown that conventional property type and spatial classifications do not capture the variation in return behaviour at the individual building level. The major feature is heterogeneity - but there may be distinctions between growth and income properties and between single and multi-let properties that could help refine portfolio structures.

Suggested Citation

  • Steven Devaney & Colin Lizieri, 2005. "Individual Assets, Market Structure And The Drivers Of Return," Real Estate & Planning Working Papers rep-wp2005-18, Henley Business School, University of Reading.
    • Handle: RePEc:rdg:repxwp:rep-wp2005-18
    as

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    File URL: http://www.henley.reading.ac.uk/rep/fulltxt/1805.pdf
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    References listed on IDEAS

    as
    1. Bryan Macgregor & Gregory Schwann, 2003. "Common features in UK commercial real estate returns," Journal of Property Research, Taylor & Francis Journals, vol. 20(1), pages 23-48, January.
    2. Peter Byrne & Stephen Lee, 2003. "An exploration of the relationship between size, diversification and risk in UK real estate portfolios: 1989-1999," Journal of Property Research, Taylor & Francis Journals, vol. 20(2), pages 191-206, January.
    3. Peter J. Byrne & Stephen Lee, 2001. "Risk reduction and real estate portfolio size," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(7), pages 369-379.
    4. Martin Hoesli & Colin Lizieri & Bryan MacGregor, 1997. "The Spatial Dimensions of the Investment Performance of UK Commercial Property," Urban Studies, Urban Studies Journal Limited, vol. 34(9), pages 1475-1494, August.
    5. Edward J. Schuck & Gerald R. Brown, 1997. "Value weighting and real estate portfolio risk," Journal of Property Research, Taylor & Francis Journals, vol. 14(3), pages 169-187, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Brett Robinson, 2012. "How many leases are enough to diversify a portfolio of multi-let industrial properties?," ERES eres2012_351, European Real Estate Society (ERES).
    2. Andrew Baum & Nick Colley, 2017. "Can Real Estate Investors Avoid Specific Risk?," Abacus, Accounting Foundation, University of Sydney, vol. 53(3), pages 395-430, September.
    3. Martin Greiner & Matthias Thomas, 2014. "Continuity of the valuation of property portfolios with stratified sampling: a case study," Journal of Property Research, Taylor & Francis Journals, vol. 31(2), pages 154-179, June.
    4. Cath Jackson & Allison Orr, 2011. "Real estate stock selection and attribute preferences," Journal of Property Research, Taylor & Francis Journals, vol. 28(4), pages 317-339, April.
    5. Franz Fuerst & Gianluca Marcato, "undated". "Re-thinking Commercial Real Estate Market Segmentation," Real Estate & Planning Working Papers rep-wp2010-12, Henley Business School, University of Reading.

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    More about this item

    Keywords

    Portfolio Structure; Return Generation Process; Real Estate;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

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