IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-031-00968-6_7.html
   My bibliography  Save this book chapter

Portfolio Theory and Property in a Multi-Asset Portfolio

In: Real Estate Investment

Author

Listed:
  • Colin A. Jones

    (Heriot-Watt University)

  • Edward Trevillion

    (Heriot-Watt University)

Abstract

Most of the commercial properties held as an investment are wrapped up in funds, large and small. Because of this, no study of commercial property investment is complete without an examination of the benefits and characteristics of holding property in these bundles of investments or portfolios. This chapter outlines the components of risk in a portfolio and how risk can be reduced by diversification. It examines the application of Modern Portfolio Theory (MPT) to property and its development in recent decades. The fundamental principle of MPT is that the risk-return attributes of individual investments are important not so much independently but in the way they contribute to the risk and return of the portfolio overall. This chapter also looks at the Capital Asset Pricing Model (CAPM) as a way of assessing returns as a function of market risk. Like MPT, the model was developed with financial markets in mind but has been adapted for use for property markets with some reservations. This chapter finishes by reprising the case for real estate in multi-asset portfolios, and the practicalities of building and holding real estate in real estate only and multi-asset portfolios.

Suggested Citation

  • Colin A. Jones & Edward Trevillion, 2022. "Portfolio Theory and Property in a Multi-Asset Portfolio," Springer Books, in: Real Estate Investment, chapter 0, pages 129-155, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-00968-6_7
    DOI: 10.1007/978-3-031-00968-6_7
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-031-00968-6_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.