Cycles in Office Returns: Stockholm As Case Study & International Comparisons
||Key, Tony; Gustafsson Christina; Aronsson Ylva; Franson Joakim
||Cycles in Office Returns: Stockholm As Case Study & International Comparisons
||10th European Real Estate Society Conference (10-13 June 2003) Helsinki, Finland
||Long-run series on realised investor returns suggest that offices tend to show poor risk-adjusted returns relative to other property market sectors. The paper is an empirical test of the performance of the dominant office markets in four countries ñ UK, Ireland, Sweden and France ñ against alternative property investments in each country. The choice of countries for analysis is determined by the availability of portfolio-based returns series running back over a sufficient period to identify long-run returns characteristics. The comparisons show that in all four countries the cores of the office markets in the dominant financial centres have produced risk-adjusted returns inferior to those in other office markets, and other market sectors. On this evidence, the offices in major centres present the largest anomaly ñ running against the standard theories on risk-return trade off ñ in property investment performance. It would appear that returns have been systematically poor in the most liquid and best informed segments of the market, and that investors have maintained high ñ in some countries rising ñ exposure to markets with historically weak performance.
Post discussion ...
||Session 2, Case Studies in Market Analysis 1
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