Continental Factors in International Real Estate Returns
Posted: 8 Jul 1998
Date Written: February 1996
In this paper, we investigate whether real estate returns are driven by continental factors. This is especially relevant for determining the country allocation of international real estate portfolios. Strong continental factors imply that optimal diversification can only be achieved by investing inter-continentally. We find strong continental factors in Europe and North America. For the Asia/Pacific region, real estate returns were independent of continental influences. This implies that European, North American and Asian real estate investors can find the best diversification opportunities in the Asia/Pacific region.
JEL Classification: G15
Suggested Citation: Suggested Citation