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Paper eres2010_074:
SECTOR, REGION OR FUNCTION? A MAD REASSESSMENT OF REAL ESTATE DIVERSIFICATION

id eres2010_074
authors Byrne, Peter; Lee, Stephen
year 2010
title SECTOR, REGION OR FUNCTION? A MAD REASSESSMENT OF REAL ESTATE DIVERSIFICATION
source 17th Annual European Real Estate Society Conference in Milan, Italy
summary This paper re-examines whether it is more advantageous in terms of risk reduction to diversify by sector or region by comparing the performance of the ""conventional"" regional classification of the UK with one based on modern socio-economic criteria using a much larger real estate data set than any previous study and the MAD portfolio approach. The general conclusion of which is that property market sectors still dominate regions, however defined and so should be the first level of analysis when developing a portfolio diversification strategy. This is in line with previous research. Then when the performance of Functional groups is compared with the ""conventional"" administrative regions the results here show that when functionally based groupings provide greater risk reduction. In particular Functional groups may be much more insightful and acceptable to real estate portfolio managers.
keywords UK, Sectors and Regions, MAD optimisation, functional groups
series ERES:conference
email p.j.byrne@reading.ac.uk
more http://www.eres2010.org/index.asp?page=papers_download
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ratings
session Real Estate Investment (3)
last changed 2010/08/04 20:47
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