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Spatial Concentration in Institutional Investment in the UK: Some comparisons between the Retail and Office Sectors

Author

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  • Peter Byrne

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

  • Stephen Lee

Abstract

Geographic diversity is a fundamental tenet in portfolio management. Yet there is evidence from the US that institutional investors prefer to concentrate their real estate investments in favoured and specific areas as primary locations for the properties that occupy their portfolios. The little work done in the UK draws similar conclusions, but has so far focused only on the office sector; no work has examined this issue for the retail sector. This paper therefore examines the extent of real estate investment concentration in institutional Retail portfolios in the UK at two points in time; 1998 and 2003, and presents some comparisons with equivalent concentrations in the office sector. The findings indicate that retail investment correlates more closely with the UK urban hierarchy than that for offices when measured against employment, and is focused on urban areas with high populations and large population densities which have larger numbers of retail units in which to invest.

Suggested Citation

  • Peter Byrne & Stephen Lee, 2007. "Spatial Concentration in Institutional Investment in the UK: Some comparisons between the Retail and Office Sectors," Real Estate & Planning Working Papers rep-wp2007-01, Henley Business School, University of Reading.
    • Handle: RePEc:rdg:repxwp:rep-wp2007-01
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    File URL: http://www.henley.reading.ac.uk/rep/fulltxt/0107.pdf
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    References listed on IDEAS

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    1. Peter Byrne & Stephen Lee, 2006. "Geographical Concentration in the Institutional Market for Office Property in England and Wales," Real Estate & Planning Working Papers rep-wp2006-07, Henley Business School, University of Reading.
    2. Mark Andrew & Steven Devaney & Stephen Lee, 2003. "Another Look at the Relative Importance of Sectors and Regions in Determining Property Returns," Real Estate & Planning Working Papers rep-wp2003-14, Henley Business School, University of Reading.
    3. Martina Bers & Thomas M. Springer, 1997. "Economies of Scale for Real Estate Investment Trusts," Journal of Real Estate Research, American Real Estate Society, vol. 14(3), pages 275-290.
    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. Leon G. Shilton & Craig Stanley, 1996. "Spatial Concentration of Institutional Property Ownership: New Wave Atomistic or Traditional Urban Clustering," Journal of Real Estate Research, American Real Estate Society, vol. 12(3), pages 413-428.
    6. Leon Shilton & Graig Stanley, 1995. "Spatial Filtering: Concentration or Dispersion of NCREIF Institutional Investment," Journal of Real Estate Research, American Real Estate Society, vol. 10(5), pages 569-582.
    7. Peter Byrne & Stephen Lee, 2006. "Geographical Concentration In The Institutional Market For Office Property In England And Wales," ERES eres2006_149, European Real Estate Society (ERES).
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    Cited by:

    1. Peter Byrne & Stephen Lee, 2008. "Spatial Concentration in Institutional Industrial Real Estate Investment in the England and Wales," Real Estate & Planning Working Papers rep-wp2008-02, Henley Business School, University of Reading.

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    Keywords

    Retail; Institutional Investment; Spatial Concentration;
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