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A behavioural study of the decision processes underpinning disposals by property fund managers

Author

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  • Richard J. MacCowan
  • Allison M. Orr

Abstract

Purpose - The main aim of this paper is to investigate the specific factors that influence fund managers' decisions to dispose of property. Design/methodology/approach - This study explores the reasons behind the decision‐making processes associated with the disposal of real estate within a portfolio, and the information sources utilised by fund managers. A behavioural finance approach is adopted with the field research carried out as a survey‐based analysis of the disposal decisions made by fund managers in the UK property fund market. Findings - The main reason for disposal of an investment is due, in part, to re‐structuring the portfolio. This is also linked to under‐performance of the asset involved, and current market expectations. The implications for the study are that it identifies that there are links between rational and irrational behaviour in the selection of assets, not only for disposal, but also in terms of investment as a whole. This can be based on the inefficiency of the property market, and the lack of accurately available information. Originality/value - The study is unique as it provides a comprehensive commentary on the disposal behaviour of fund managers at the individual property and portfolio‐wide levels.

Suggested Citation

  • Richard J. MacCowan & Allison M. Orr, 2008. "A behavioural study of the decision processes underpinning disposals by property fund managers," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 26(4), pages 342-361, July.
    • Handle: RePEc:eme:jpifpp:v:26:y:2008:i:4:p:342-361
    DOI: 10.1108/14635780810886645
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    Citations

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    Cited by:

    1. Melanie Zhang & Steven Devaney & Anupam Nanda, 2018. "Strategic Alliance and Submarket Choices of Commercial Real Estate Investors – A Multinomial Approach," ERES eres2018_210, European Real Estate Society (ERES).
    2. Patrick Krieger & Carsten Lausberg, 2021. "Entscheidungen, Entscheidungsfindung und Entscheidungsunterstützung in der Immobilienwirtschaft: Eine systematische Literaturübersicht [Decisions, decision-making and decisions support systems in r," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 7(1), pages 1-33, April.
    3. Gert Abraham Lowies & Christiaan Ernst Cloete, 2013. "The Influence of Frame Dependence on Investment Decisions made by Listed Property Fund Managers in South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 5(11), pages 805-814.
    4. Simeon Coleman & Vitor Leone, 2015. "An investigation of regime shifts in UK commercial property returns: a time series analysis," Applied Economics, Taylor & Francis Journals, vol. 47(60), pages 6479-6492, December.
    5. Osman Sayid Hassan Musse & Abdelghani Echchabi & Hassanuddeen Abdul Aziz, 2015. "Islamic and Conventional Behavioral Finance: A Critical Review of Literature التمويل السلوكي الإسلامي والتقليدي: مراجعة نقدية للأدبيات," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 28(2), pages 237-251, July.

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