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Article
Publication date: 1 March 1984

Patrick Hall and Stephen Hargitay

Introduction The principal objective of a portfolio manager's work is the construction and maintenance of successful, efficient portfolios of investment assets. It is…

Abstract

Introduction The principal objective of a portfolio manager's work is the construction and maintenance of successful, efficient portfolios of investment assets. It is necessary, therefore, that methods are designed and made available through which the success and efficiency of portfolios may be assessed. Only through the continuous monitoring of the achieved results can long term investment strategies succeed.

Details

Property Management, vol. 2 no. 3
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 March 1985

STEPHEN HARGITAY

To maintain and enhance the efficiency of a property portfolio the portfolio manager should select those property investment propositions which promise the maximum…

Abstract

To maintain and enhance the efficiency of a property portfolio the portfolio manager should select those property investment propositions which promise the maximum improvement of portfolio return and reduction of portfolio risk. To cope with this difficult task the portfolio manager needs appropriate decision criteria. This paper discusses some of the selection criteria evolved through the developments in capital market theory in order to assess their usefulness in property asset selection procedures. The use of the ‘reward‐to‐volatility’ criterion to select appropriate property portfolio projects is explored through a worked example. The reliability of such selection procedure depends on the availability of reliable historic record of the performance of the property market and of the property portfolio together with the portfolio manager's ability to perceive expected returns in different ‘states of the world’.

Details

Journal of Valuation, vol. 3 no. 3
Type: Research Article
ISSN: 0263-7480

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Article
Publication date: 1 February 1985

STEPHEN HARGITAY

The traditional approach and methodology can no longer cope effectively with the complexities and problems associated with large scale property investment. The level of…

Abstract

The traditional approach and methodology can no longer cope effectively with the complexities and problems associated with large scale property investment. The level of sophistication of the analysis of property investments is still much lower than the analysis of investments in other media. There is a need to establish an analytical framework which could facilitate the management of the complex decision making and management problems associated with large property investment portfolios. The principal aim of this paper is to identify and rationalise the property portfolio problem in order to pave the way for the applications of recent developments in investment and portfolio theory. The definition of the general portfolio problem is followed by a comparison of the nature and characteristics of property portfolios and stock market security portfolios. The property portfolio problem is defined as a complex decision making problem requiring effective decision making in three stages: investment policy, selection and portfolio assembly, and finally management and portfolio rationalisation.

Details

Journal of Valuation, vol. 3 no. 2
Type: Research Article
ISSN: 0263-7480

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Article
Publication date: 13 February 2007

A. Olaleye, B.T. Aluko and C.A. Ajayi

The purpose of this paper is to examine the factors that have influenced the use of implicit (naïve) techniques in property portfolio diversification evaluation in the…

Abstract

Purpose

The purpose of this paper is to examine the factors that have influenced the use of implicit (naïve) techniques in property portfolio diversification evaluation in the Nigeria property market. This is necessitated by the need to look at the ways by which the property portfolio diversification evaluation practice in the market could be made to improve and adjust to ever changing global trends in this area.

Design/methodology/approach

The authors of this paper administered questionnaires, backed up with interviews, on 28 institutional property investors and 128 real estate practitioners in three locations (commercial nerve centres) of the country, namely, Lagos, Abuja and Port‐Harcourt metropolitan areas. Data were analysed with the use of frequency distribution, mean and standard deviation measures, relative importance index and Pearson Chi‐Square test.

Findings

The results of the study in this paper revealed, among others, that lack of time series data and the small size of many of the investors' portfolios in Nigeria encouraged the use of implicit analysis in their property portfolio evaluation techniques. The study also showed that investors and practitioners detest complex calculations and were using traditional evaluation techniques because they considered the methods as needing no pre‐requisite knowledge before they could be used.

Practical implications

The study in the paper concluded that there is the need for a restructuring of the Nigerian real estate education and portfolio evaluation practice and the use of a micro‐real estate specific data derived from local market information to develop property performance indices towards building up functional real estate indices at the regional and national levels.

Originality/value

This paper is a pioneering attempt at establishing the factors that influenced the use of implicit techniques in property portfolio diversification evaluation in emerging property markets like Nigeria.

Details

Journal of Property Investment & Finance, vol. 25 no. 1
Type: Research Article
ISSN: 1463-578X

Keywords

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Article
Publication date: 1 June 2005

Alastair Adair, Norman Hutchison, Jim Burgess and Stephen Roulac

The value of land for development is normally estimated by the use of the comparative method or the residual approach. The aim of the paper is to examine appraisal…

Abstract

Purpose

The value of land for development is normally estimated by the use of the comparative method or the residual approach. The aim of the paper is to examine appraisal practice, in particular the bases of valuation, availability and utilisation of data, reporting of the value figure and the management of risk.

Design/methodology/approach

The paper reports the findings of a survey of valuers from leading practices throughout the UK, bank lenders and developers. An example of an appraisal of an urban regeneration site is included in order to highlight the key issues within the discussion.

Findings

A variety of reporting practices is found from a tightly drawn range of values to single‐point estimates along with a detailed explanation of the assumptions employed. Developers and lenders favoured the latter, but they appeared to be open‐minded about a range of values or an expression of uncertainty being reported, provided that there is a clear and well supported justification. Risk management approaches are underdeveloped within the profession.

Originality/value

The valuation of urban regeneration land is said to be one of the most vexed issues in the appraisal of projects due to a lack of data transparency in urban regeneration markets, shortcomings in traditional appraisal methodologies and complexities of public sector grant procedures.

Details

Journal of Property Investment & Finance, vol. 23 no. 3
Type: Research Article
ISSN: 1463-578X

Keywords

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Article
Publication date: 29 July 2014

David Parker

– The purpose of this paper is to investigate property investment decision making by Australian REITs.

Abstract

Purpose

The purpose of this paper is to investigate property investment decision making by Australian REITs.

Design/methodology/approach

Through an extensive literature review, a normative model of the property investment decision-making process is proposed. Based on semi-structured interviews with senior Australian REIT decision makers, a descriptive model of the property investment decision-making process by Australian REITs is developed. The normative model and descriptive model are compared and a prescriptive model of the Australian REIT property investment decision-making process proposed.

Findings

With the four stage, 20-step process proposed in the normative model found to be generally supported by the descriptive model developed, this may potentially comprise an effective prescriptive model for the Australian REIT property investment decision-making process.

Research limitations/implications

Further research is required to investigate if the prescriptive model is generalisable across other property investment decision-making groups or over time and whether it may lead to “good” decisions.

Practical implications

The prescriptive model proposed may contribute consistency and transparency to the decision-making process, if adopted by Australian REITs, potentially leading to better decisions.

Social implications

Greater consistency and transparency in property investment decision making by Australian REITs may lead to the optimal allocation of capital and greater investor confidence in the sector.

Originality/value

The findings comprise the first prescriptive model of the Australian REIT property investment decision-making process, forming a basis for comparative investigation of that process adopted by other property investment decision-making groups.

Details

Journal of Property Investment & Finance, vol. 32 no. 5
Type: Research Article
ISSN: 1463-578X

Keywords

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Article
Publication date: 17 October 2016

David Parker

The purpose of this paper is to investigate the property investment decision-making process of Australian unlisted property funds.

Abstract

Purpose

The purpose of this paper is to investigate the property investment decision-making process of Australian unlisted property funds.

Design/methodology/approach

Drawing on previous research into property investment decision making by Australian REITs, a normative model of the unlisted property fund investment decision-making process is proposed. Based on exploratory investigation through semi-structured interviews with senior Australian unlisted property fund decision makers, a descriptive model of the property investment decision-making process by Australian unlisted property funds is developed. The normative model and descriptive model are compared and a prescriptive model of the Australian unlisted property fund investment decision-making process proposed.

Findings

A four-stage, 20-step process proposed in the normative model was found to be generally supported by the descriptive model developed, potentially comprising a possible prescriptive model for the Australian unlisted property fund investment decision-making process.

Research limitations/implications

Further research is required to investigate risk-return issues, whether the prescriptive model is generalisable across other property investment decision-making groups or over time and whether it may lead to “good” decisions.

Practical implications

The prescriptive model proposed may contribute consistency and transparency to the decision-making process, if adopted by Australian unlisted property funds, potentially leading to better decisions.

Social implications

Greater consistency and transparency in property investment decision making by Australian unlisted property funds may lead to the optimal allocation of capital and greater investor confidence in the sector.

Originality/value

The findings comprise the first possible prescriptive model of the Australian unlisted property fund investment decision-making process, forming a basis for comparative investigation of that process adopted by other property investment decision-making groups such as Australian REITs and Australian retail property funds.

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Article
Publication date: 1 December 1994

Peter Byrne and Stephen Lee

Discusses a spreadsheet tool called an “optimizer” which is useful forexamining certain real estate investment problems. Describes what thistool is (a means of, for…

Abstract

Discusses a spreadsheet tool called an “optimizer” which is useful for examining certain real estate investment problems. Describes what this tool is (a means of, for example, maximizing return while minimizing risk) and how it functions, giving examples of calculations and functioning. Concludes that such a tool is potentially powerful, but that formulae could easily be set up incorrectly. Adds that spreadsheets and manuals do not contain enough documentation for beginners to understand results fully.

Details

Journal of Property Finance, vol. 5 no. 4
Type: Research Article
ISSN: 0958-868X

Keywords

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