Eres : Digital Library : Works

Paper eres2015_81:
Are Public and Private Real Estate Returns and Risks the Same?

id eres2015_81
authors Hoesli, Martin; Elias Oikarinen
year 2015
title Are Public and Private Real Estate Returns and Risks the Same?
source 22nd Annual European Real Estate Society Conference in Istanbul, Turkey
summary This article investigates the similarity of public and private real estate returns and risks over the long horizon using data for the U.S and the U.K. The results show evidence of a one-to-one relationship between publicly traded REIT performance and privately traded direct real estate investment performance in three out of four U.S. real estate sectors and one out of two U.K. sectors. The return volatilities generally do not differ significantly between the REIT and direct real estate markets regardless of investment horizon. The findings have important practical implications. First, they indicate that public and private real estate investments can be considered to work as good substitutes in an investment portfolio with several years investment horizon. Second, they suggest that REIT related ETFs and derivatives could be used to hedge risks caused by investors’ direct real estate holdings or by lending institutions’ mortgage lending inventory.
keywords Return, Risk, REIT, Hedging
series ERES:conference
type panel session
content file.pdf (402,481 bytes)
discussion No discussions. Post discussion ...
session Public Real Estate Investments; An International Perspective
last changed 2015/07/11 10:06
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